Messaging app startup Snapchat has raised $175 million in fresh funding from Fidelity Investments and other investors, according to Reuters. The investment is an extension of Snapchat’s Series F financing round, which the company began raising last year.
Snapchat, which makes a free app for sending messages and videos that disappear in seconds, raised the financing at the same $16 billion valuation it had a year ago, The Wall Street Journal reported.
Fidelity bought shares of the company at $30.72 per share in February, the same price at which it bought Snapchat shares in March 2015, the Journal reported.
During the third quarter last year, Fidelity reportedly slashed the value of its original stake in Snapchat by 25 percent, although it marked it back up by about 15 percent during the fourth quarter.
The “flat round,” in which a company’s valuation does not grow despite an influx of new money, suggests Snapchat’s valuation may have grown too quickly and investors are now readjusting their expectations.
Still, at $16 billion, Snapchat is the sixth most highly valued venture-backed company in the world, tied with Chinese ride-hailing company Didi Kuaidi.
Snapchat was founded in 2011 by Evan Spiegel and Bobby Murphy, when they were students at Stanford University. It is headquartered at a beachfront property in Venice, Calif.
The startup’s investors include Alibaba, Prince Alwaleed’s Kingdom Holding, Yahoo, Kleiner Perkins Caufield & Byers, Tencent, Benchmark and other premier investors, but it has yet to prove that it can be profitable.
The app provider has worked to expand its fledgling advertising business – its only real form of revenue – and last month formed a partnership with Viacom, which gave Viacom exclusive rights to sell advertising around Snapchat’s content, added Reuters reporter, Heather Somerville.
(Additional reporting by Parikshit Mishra in Bengaluru; Editing by Andrew Hay and Leslie Adler of Reuters)