Photo messaging app Snapchat raises $485.6m at $10bn valuation

Photo messaging app Snaptchat has completed its latest fund raising round at a company valuation of $10bn, justifying its decision to reject a $3bn offer from Facebook more than a year ago.

In a filing with the US Securities and Exchange Commission (SEC), the three-year old company revealed that it raised $485.6m (£311.8m, €401.3m) in the latest round from 23 investors. Snapchat has so far received investments of about $648m.

While the firm did not reveal the names of new investors, media reports said tech giant Yahoo and venture capital firm Kleiner Perkins Caufield & Byers were involved in the round.

Existing investors in the firm include Benchmark, General Catalyst, Lightspeed Venture Partners and DST, as well as hedge fund Coatue Management.

To its credit, Snapchat has almost doubled the number of its active users to 200 million last year and started making money through advertisements. In October, it launched its first advertisement, promoting Universal Pictures' horror film Ouija.

In November, the company along with Square launched a service called 'Snapcash' that enables its US users to transfer money to their friends.

Nevertheless, the firm suffered a security breach nicknamed "The Snappening" in October 2014, resulting in the leaking of a large amount of explicit images sent by users.

The company also faced regulatory scrutiny over its service. It earlier settled a lawsuit from ousted co-founder Reggie Brown.

Snapchat earlier turned down a $3bn acquisition offer from Facebook Inc, having found the price undervalued its potential.

Earlier in December, the company hired Credit Suisse Group AG's Imran Khan as chief strategy officer.