Snapchat CEO Evan Spiegel revealed Tuesday at the California Code Conference in Rancho Palos Verdes that the company is planning for an initial public offering (IPO). He said the company, recently valued at $15 billion, had no desire to be acquired in a merger like the Facebook’s $3 billion offer two years ago. Then, in a refreshing twist for such a young captain of industry, Spiegel warned that the Fed’s “easy money policy” and low interest have created a tech bubble and it’s only a “matter of time till it bursts.”
In just four years, Snapchat is now ranked as one of the most popular social-networking apps on the planet. Spiegel confirmed Tuesday the company has almost 100 million users logging on daily, and that 65 percent are creating content on the app.
Spiegel did not disclose the total user count, but it must be several hundred million users in total. That compares to eleven-year-old Facebook, which had 936 million daily users as of March, and nine-year-old Twitter (TWTR-NASDAQ), which claims about half of its 300 million monthly users log onto the social site every day.
Snapchat has huge appeal with teenage users, because its “sexting” messages permanently disappear after a single viewing. The Snapchat app was so distracting to young students that New York former Mayor Michael Bloomberg banned cellphone use in New York City schools.
But Spiegel said the company intends to move beyond messaging and will eventually become a next-generation media business. He highlighted that Snapchat has partnered with media brands, including ESPN and Yahoo, on its Discover service, which shows news articles and videos that disappear after one day.
Snapchat is working to turn its subscription free messaging app into a profitable business after completing an $800 million venture capital funding at a valuation of $15 billion in March. Spiegel said the company has recently begun selling ads and will launch a “self-serve ad product” over time. He also believes the company should diversify revenue, because “great businesses” have multiple forms of revenue.
When the conference interviewers Kara Swisher and Walt Mossberg asked about the Silicon Valley investment climate, Spiegel responded that he predicts a serious “correction” is coming. He warned we are currently living through a tech bubble and that it’s a matter of when, not if, the tech bubble will burst. “I think that people are making riskier investments and…there will be a correction,” he reportedly said on the first night of the conference. Spiegel added that it is “definitely something we factor into our plans.”
Uniquely for a 24-year-old, Spiegel blamed the Fed’s “easy money policy” and low interest rates for spurring the recent bubble in venture capital, private equity, hedge funds and start-up fundraising. Spiegel said the investment bubble may not last a whole lot longer if recent economic indicators are a guide.
When asked if his hands-on style was responsible for the departure earlier this year of Emily White, a former Facebook executive who served as Snapchat’s chief operating officer for less than two years, Spiegel replied, “I’m not a great manager.” But he took credit for Snapchat’s success by adding, “I try to be a great leader.”