Snapchat Could Be Valued As High As $22.7 Billion: Here's Why

Tech Crunch reported Monday that the popular social media app Snapchat is looking to raise $200 million at a valuation possibly as high as $22.7 billion.

Citing "sources with knowledge of the deal," TechCrunch noted that Snapchat conducted a $175 million Series F round led by Fidelity back in March. At that time, the company was valued at $16 billion.

However, TechCrunch added that the Series F round was expended with a Series FP at a price of $30.72 per share. Expanding the Series F with a Series FP fits in with what the publication described as Snapchat's culture of "always raising" on a "rolling" basis because investors are so interested.

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"They get offers all the time," an investor close to the company told TechCrunch. "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."

Investors And IPO Chatter

Other notable Snapchat investors include Alibaba Group Holding Ltd BABA, which led a Series E financing round. Saudi Arabia's investment arm Kingdom Holding Company led a Series B financing round.

Tencent and Yahoo! Inc. YHOO are also Snapchat investors.

Finally, TechCrunch suggested that while Snapchat continues to gain popularity, especially among the Millennial demographic, its valuation could become "risky."

"The greater the valuation, the less likely companies could afford to acquire Snapchat," the publication suggested. "It also puts pressure on an eventual IPO, with the expectation that the company's market cap will be higher."