Wednesday, March 18, 2015

Staid Singapore Supporting Sexting Startup

I was surprised to see GIC on the list of investors onSnapchat’s last funding round. Snapchat first became famous as a platform for exchanging nude or otherwise suggestive images, known as “sexts”. Snapchat’s selling point is ephemerality – the image messages it sends disappear after a few seconds. That didn’t sound like the type of service the Singapore government’s investment fund would want to associate with.

 

But fast forward a few years, and Snapchat seems to have distanced itself from its sexting origins. Users today deny using it for sexting, and it has gained a remarkably high rate of adoption among high school and college students. Among numerous messaging platforms, Snapchat has managed to distinguish itself, and it is currently one of the hottest startups in Silicon Valley. It is also one of the biggest in the world – ranked third largest privately-funded company behind Uber and Xiaomi, and ahead of the likes of Airbnb and Dropbox. It is valued at $15b based on the latest valuation done for Alibaba’s $200m investment in March. (GIC also invested in Xiami.)

Personally, I can’t figure Snapchat out. I could barely figure out how to use it, nor why I would even want to use it, and I’m considered pretty social media savvy. But as my venture capitalist instructors have taught me – just because it doesn’t appeal to me doesn’t mean it doesn’t have appeal, because it has captured millions of young users. There are plenty of articles online about why Snapchat is successful, so I won't try to explain it. And apparently even business users are starting to use it, as a preventive measure to falling victim to the likes of Wikileaks or the Sony Pictures hack.


As I thought about it and read more, my surprise turned into respect. Somehow, GIC got its teeth into one of the fastest growing success stories in Silicon Valley, and I think that is a good sign that they are adventurous and also seen as a desirable partner. I’m glad my money is in good hands.