Because Snapchat may go public in March 2017, investors are asking us a lot of questions, including "when did Snapchat start?"
That's why ahead of the inevitable Snapchat IPO, we've created a Snapchat stock guide for our readers with some of the most common questions we've received.
We'll share that guide with you in just a bit.
But first, here's the history of how Snapchat started and became one of the most popular social media sites for teens and millennials....
When Did Snapchat Start?
The idea for Snapchat came from three Stanford students: Evan Spiegel, Reggie Brown, and Bobby Murphy.
TechCrunch reported Brown wanted the photos he was sending a woman to have the capacity to disappear. When Spiegel heard this, he termed it a million-dollar idea.
The three started working on a social media site with disappearing messages in the spring of 2011.
At the time, eventual rival Facebook Inc. (Nasdaq: FB) was the subject of two concerns. One was employers and other institutions looking at applicants' Facebook profiles. Users were concerned some of their pictures may be perceived negatively.
The other was the response to user requests to delete pictures from Facebook's servers. At the time, the status of requests to delete pictures or make them private was not clear.
So the demand for disappearing picture and video messages, along with more privacy, was starting to build.
The newly developed product from the trio was named Picaboo. At its July 2011 launch, it had just 127 users.
Picaboo was renamed Snapchat in the autumn of 2011.
The growing success of Snapchat made it an acquisition target for Facebook CEO Mark Zuckerberg. According to The Wall Street Journal, Facebook offered $3 billion for Snapchat in 2013.
Snapchat said no.
That brings us to today. Snapchat has over 150 million daily active users (DAUs) and is projected to generate $1.76 billion in revenue by 2018, according to Bloomberg.
Because of its success, Snapchat is preparing for an IPO. And when Snapchat goes public, it could be the biggest IPO of 2017.
Here's everything you need to know...
Your Snapchat Stock Guide
[mmpazkzone name="in-story" network="9794" site="307044" id="137008" type="4"]
According to WSJ, the Snap IPO could happen in March 2017.
The lead underwriters will be investment bankers Morgan Stanley (NYSE: MS) and Goldman Sachs Group Inc. (NYSE: GS).
And when Snap does go public, it could be the biggest IPO since Alibaba Group Holding Ltd. (NYSE: BABA). That's because of the hype Snapchat stock will receive thanks to its rapid revenue growth. Snap Inc. made over $3 million in revenue in 2014. For 2016, Bloomberg projects revenue will be $366 million.
That's a whopping 12,100% increase in revenue in just two years.
Estimates of Snapchat's potential total valuation range from $25 billion to $40 billion. At a $25 billion valuation and projected revenue of $1 billion, the Snap Inc. IPO could be priced at 25 times 2017 earnings.
That's why we're telling our readers to assess their risk tolerance and their investing goals before investing in the Snapchat IPO.
The tech sector is historically volatile, particularly after IPOs. Facebook stock, for example, dropped 50% after its IPO.
But there are two ways to profit from the Snapchat IPO. You can find everything you need to know about Snapchat stock and investing in Snapchat in our exclusive guide, right here.
The Bottom Line: When did Snapchat start is one of the most common questions we receive. It started back in 2011, with three Harvard students working on a social network that allowed messages to disappear after they were viewed. Because of Snapchat's massive success, it's preparing for an IPO, and Snapchat stock could be available to the public in March 2017.