What’s next for Snapchat? Will it reach beyond the heights of Facebook, or stagnate like Twitter? Snap Inc., the parent company of Snapchat, went public on Thursday. Snap was one of the biggest offerings in the tech sector since Alibaba.
However, many venture capital and private equity firms are steering clear of the 15-year startup sector for now. Startups like Friendster, which once had over 75 million users, or Yik-Yak, the former viral gossiping app, cut down on costs and laid off the majority of its staff last December, seeing stalling growth and a plateauing user base.
This threat does not just affect small-scale startups. Twitter Inc. boasted a $25 billion valuation and colossal IPO in 2013, with over 232 million monthly users. Since then, user growth stagnated, as did its revenue growth and market value.
On the other side, Snap Inc. could become the next Facebook or LinkedIn. Facebook boasts just under two billion monthly active users, and is valued at nearly $400 billion. LinkedIn carries over 15 million monthly users, and sold to Microsoft [stock symbol=”MSFT”] for $26 billion.