Did Snapchat Turn Down A £23 Billion Offer From Google?

Did Snapchat turn down a $30 billion (£23 billion) offer from Google? While neither company will publicly confirm whether the offer was discussed, this rumour has been circulating in the tech world and, according to Business Insider, has resurfaced in the last several days.

A representative for Snapchat told the outlet that as far as a formal buyout discussion, "these rumours are false." However, their report cites three people either inside or close to the company each separately confirming both the offer and the offer amount calling it an "open secret" amongst Snapchat's upper management and certain circles in the tech industry.

Since neither Google nor Snapchat has confirmed that this offer was on the table even in an informal capacity, it is unknown how serious the talks were about a potential buyout. Within the industry informal discussions of this nature are common.

The two tech companies have quite a close relationship, both in and out of the office. Snapchat is one of the largest users of Google Cloud and Alphabet's executive chairman, Eric Schmidt, was an early adviser to Snapchat's CEO, Evan Spiegel. For years now, Google has wanted a social media platform of their own having tried with ventures like Google Plus and Google Buzz.

The timeline of the rumoured offer is said to be just before Snapchat completed a large round of private fundraising in May 2016. At the time, the company was valued at $20 billion (£15 billion). One quiet contributor to this round of fundraising was CapitalG, the growth equity fund managed by Google's parent company, Alphabet. Another one of the anonymous sources who spoke to Business Insider said that an offer of $30 billion was being discussed just before Snapchat's initial public offering, their first foray into the public stock exchange, in March of this year.

It isn't the first time that the photo and video sharing app has been courted for a buyout. Back in 2013, Facebook offered $3 billion (£2.3 billion) for the then 2-year-old company and was turned down. In an interview with Forbes, CEO Evan Spiegel explained why. "There are very few people in the world who get to build a business like this," Spiegel shared in the interview. "I think trading that for some short-term gain isn't very interesting."

Snapchat is now 6-years-old, and their stocks are trading well below the $24 billion valuation they had at the initial public offering in spring. Joining forces with Google could help Snapchat better monetise its platform. Only time will tell whether the whispers in Silicon Valley were true.