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Snapchat eyes $1B valuation and raises millions in funding

There's going to be a great deal of money put into Snapchat, a messaging app that allows users to take photos and videos and send them to friends.

New rumours hitting the airwaves over the past few days suggest that Snapchat is on the cusp of receiving a new $100 million (£64 million) investment from undisclosed investors. The funding boost also allegedly comes with a valuation "in excess of half a billion dollars," reports Gigaom.

There's a bit of contention over the latter figure, however. While some sources have indicated that the "in excess" bit is closer to an overall valuation of $700 million (£451 million), TechCrunch is reporting that Snapchat founders Evan Spiegel and Bobby Murphy are actually looking to lock down a valuation of $1 billion (£644 million).

If that seems a little hard to believe, it's difficult to discount Snapchat's growing popularity – more users take photos on the service than on Instagram now, according to the most recently released Internet Trends report from Kleiner Perkins Caufield & Byers partner Mary Meeker.

As for raw stats, Snapchat users send approximately 150 million images each day, according to figures teased by Spiegel in April. The company previously pulled in $13.5 million (£8.7 million) in funding earlier this year, led by Benchmark Capital. The funding earned Snapchat a valuation of around $60 million to $70 million (£39 million to £45 million) – how times change!

Now the difficult part: monetisation. It's been Snapchat's goal to monetise its app for some time, and the company is allegedly hiring up a number of ad sellers at the moment. While the details of Snapchat's plans haven't been fully disclosed, it's likely that mobile advertising will find its way into Snapchat's app at some point in the future – amongst other revenue streams.

It remains to be seen whether an renewed focus on advertising will upset Snapchat's core base of high school and university students. As Gigaom reports:

"We have seen the challenges of monetization in a mini-backlash over on post-Yahoo acquisition Tumblr. Facebook, in its attempts to grow revenue, has polluted the experience with too many ads and its division. Instagram is still searching for possible revenue streams."

Snapchat released a brand-new version of its iOS app last week. Version 5.0 of the app brings some new swipe navigation elements into the mix, in-app profiles for one's friends, and a few tweaks related to sending and replying to messages.