Until recently, it would have been a safe bet that no 23-year-old in the world had ever turned up his nose at $3 billion. But that's exactly what Evan Spiegel, the co-founder and chief executive of messaging service Snapchat, did when Facebook offered to buy his company.
Citing unnamed sources familiar with the offer, The Wall Street Journal reports Facebook offered Snapchat an all-cash deal of $3 billion or more. At the time of its last funding round, in June, Snapchat was valued at only $800 million. (It raised $60 million in June of a total $73 million to date.)
The deal would have marked Facebook's most expensive acquisition, outstripping even its $1 billion purchase of Instagram in 2012.
Snapchat has been enjoying explosive growth as the app of the moment for teens, tweens and twentysomethings who act like teens. In September, Spiegel announced that his service transmitted 350 million snaps a day, up 75 percent from the time of its $60 million Series B round. Snapchat allows users to send photo and video messages to each other that disappear after several seconds. The ephemeral nature of Snapchats make them a popular medium for sexually suggestive photos, not to mention silly stuff that you don't want preserved forever on a Facebook Timeline.
Still, given that Snapchat has yet to earn any revenue, the idea of turning down a buy offer three times the value of that which Mark Zuckerberg himself once turned down seems -- not to put too fine a point on it -- insane. It appears Spiegel and his co-founder, Bobby Murphy, also turned down a $200 million investment offer from Chinese company Tencent Holdings that would have valued Snapchat at $4 billion.
But Snapchat's young executives may soon have a better offer on the table. According to The Wall Street Journal, they are hoping their numbers continue to improve through early 2014, when they may be finally willing to consider an acquisition or investment. But they may be kicking themselves if their core user base becomes enamored of another service and leaves Snapchat behind before its founders can cash in.