Snapchat has made a groundbreaking decision by rejecting a $3 billion cash acquisition offer from Facebook. Now, Snapchat CEO, Evan Spiegel, has explained the reason why he hasn’t sold the company yet:
“There are very few people in the world who get to build a business like this. I think trading that for some short-term gain isn’t very interesting”, said Evan Spiegel.
This statement might sound like a standard answer for a founder, until people start to wonder how much the “short-term gain” actually was. It was estimated that Spiegel and his co-founder, Bobby Murphy, would each have received $US 750 million from the Facebook offer. The deeper reason for the decision is that Snapchat’s founders sensed weakness and opportunity.
Mark Zuckerberg first meet Spiegel in his hometown at the end of 2012 and try to “scare” Snapchat’s founders by telling them that Facebook planned to release a nearly identical app a few days later. “It was basically like, ‘We’re going to crush you’,” said Spiegel. That app was Facebook Poke, which proved to be a fiasco. Zuckerberg paid another visit to the young company in 2013 to make his bid to buy it, but by that point Snapchat’s founders felt they had an edge.
Snapchat has since raised another $55 million at a reported $US2 billion valuation – less than Facebook’s reported bid.