Probably not the comparison investors are looking for.

In late 2016, the Wall Street Journal reported that Snap, the camera and messaging startup preparing for an IPO, was planning a message for potential investors: We’re the next Facebook, not the next Twitter.

The numbers, though, tell a different story.

Snap publicly filed its IPO paperwork Thursday with the Securities and Exchange Commission, providing outsiders with their first real glimpse inside the super-secretive company.

In some ways, Snap does look like Facebook. The company finished 2016 with 48 percent year-over-year user growth, roughly the same growth rate of Facebook’s daily audience the year before its IPO (though Facebook’s user base was more than three times the size of Snap’s).

But in more ways Snap’s S-1 looks more like Twitter’s S-1. Their revenue totals and number of employees are roughly the same. Neither company is profitable. And both companies have modest user bases, at least compared to Facebook.

Here’s how the three companies stack up.

  • Snap lost $514 million in 2016. Twitter lost $79 million the year before its IPO. Facebook, on the other hand, was bringing in $1 billion in profit.
  • Snap had revenue of $404 million in 2016. Twitter had revenue of $317 million the year before its IPO. Facebook was already a money-making machine, with revenue of $3.7 billion the year before its IPO.
  • Snap has 158 million daily active users. Twitter, which only reports monthly active users, had 218 million. Facebook dwarfed them both, with 845 monthly active users, and 483 million daily active users.
  • Snap has 1,859 employees. Twitter had 2,000. Facebook had 3,200.

Is it possible Snap will grow into its Facebook ambitions? Of course. Snap is just five years old. Facebook didn’t IPO until eight years after it was founded. So Snap is operating on a much shorter timeline.

But given the vast gap between where Twitter and Facebook are today — Facebook’s market cap is more than 30 times Twitter’s — investors must certainly hope that these early comparisons don’t end up meaning much.


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Author: Kurt Wagner

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