Snapchat is raising more money around $20 billion valuation

Snapchat may have first made its name in the crowded world of mobile apps with an ephemeral messaging service, but the startup and its wildly popular app are not disappearing anywhere soon. TechCrunch has learned from multiple sources that Snapchat is raising yet more financing at around a $20 billion valuation. Sources with knowledge of the deal say the social media giant is in the process of a round of about $200 million.

This new financing, we understand, is a follow-on to the $175 million Series F round led by Fidelity. Snapchat was said to be valued at $16 billion in that round, flat on the year before. However, filings from earlier this month and embedded below, uncovered for us by market analysts VC Experts, show that the Series F was expanded.

Based on a share price of $30.72 per share — which VC Experts tells us was the value disclosed in an earlier Fidelity Fund filing related to its Snapchat investment — and assuming all of the authorized shares are issued, the more recent valuation could be as high as $22.7 billion. Authorized shares do not always all convert to issued shares, but this gives us a range that fits in with what we’ve heard about the $20 billion valuation.

Expanding the Series F with a Series FP, as it’s described in the document below, would also fit in with a description we’ve heard more than once about Snapchat’s fundraising: The startup is “always raising” on a “rolling” basis, partly because investors are so interested.

“They get offers all the time,” one investor close to the company said. “And once you start to grow on this path, many people come to give you money. You don’t know how to value the company, so the best way to do that is to do some kind of rolling funding. When you have a hot company and many people are approaching you, you do a market of discovery.”

That may be different from other startups, but in a way it reflects Snapchat’s own fast growth and its taste for trying out new things like QR codes to connect to accounts and content, their crazy face-changing filters and more.

Besides Fidelity, other existing investors in the company include Alibaba, which led its Series E; Benchmark (Series A lead); Coatue Management (Series C lead); General Catalyst; IVP (Series B lead); Saudi investment group Kingdom Holding Company; KPCB (series D lead); Lightspeed (Snapchat’s earliest and most constant investor); SV Angel; WeChat owner Tencent and Yahoo. We hear that many existing investors are looking to participate in this new round, including Spark Capital.

Snapchat declined to comment on the newer fundraising. Sources close to the company confirmed that a previous round had already closed earlier this year at a valuation different from the $20 billion we’ve been hearing.

Snapchat, based out of Los Angeles, has had rapid growth since launching five years ago. The startup says it has over 100 million daily active users of its photo and messaging service.

While there is no question that Snapchat is gaining traction, particularly with the millennial demographic, the hefty valuation can be risky. The greater the valuation, the less likely companies could afford to acquire Snapchat. It also puts pressure on an eventual IPO, with the expectation that the company’s market cap will be higher.

Tumultuous tech stocks and other unknown factors resulted in Fidelity writing down its value of Snapchat last fall. But that didn’t prevent the investor from buying more shares this spring.

Those who are bullish on the company believe the high valuation will bear out. The company, said a source, is thinking “two or three generations out” in terms of its growth and what it will tackle next, whether that is more international markets, a wider range of demographics, new kinds of advertising or other paid services or new products altogether.

One source claimed that hardware is in the company’s sights, which is not the first time this has come up.

It is also possible that it will continue to make acquisitions to fuel growth. Snapchat acquired Bitstrips for $100 million in recent months.

The new round would bring Snapchat’s total funding to over $1.5 billion.