Based on the valuation of Snap Inc. (NYSE: SNAP), the social network that has raised $3.4 billion in an initial public offering that values the company at $20 billion, management at other companies in the sector have to consider how they can raise money at nose-bleed valuations in the public markets. To convince Wall Street of its value, any single company would need to show it has a size that approaches Snapchat in total number, as well as a viable business plan. That company is Viber.
Viber is owned by Japan’s Rakuten, a worldwide internet provider, which has over 14,000 employees. Rakuten paid $900 million for Viber in 2014.
At the end of last year, Viber had 858 million registered users. Viber does have a lot of competition, but for that matter, so does Snapchat. Among the largest rivals are Facebook Inc. (NASDAQ: FB) Messenger, Snapchat and WhatsApp.
Mobile messaging apps are considered one of the most important new communication tools in the world. Viber has the full suite of features, including chat and voice and video calls. And Viber has crossed into one of the most important social media features. It has become a platform for e-commerce. According to TechCrunch, reported on February 23:
Messaging app Viber is today announcing a new feature that taps into the bigger trend of messaging apps becoming multi-functional platforms, and also its ownership by e-commerce company Rakuten. Viber will start to present users with items for sale, inspired by your current chat, when you press a small shopping bag icon at the bottom of the screen and search for items.
The feature is due to go live in the U.S. first, on March 6, before Viber looks to roll it out to other markets. It will kick off with a selection of items covering a range of categories — from electronics and home goods through to fashion — from Rakuten’s own Rakuten.com, as well as items curated by some 30 other brands.
The full list is not being made public yet, but Djamel Agaoua, the company’s new CEO, told me that one of them will be the department store Macy’s. There will also be an area in the shopping feature dedicated to “deals” — meaning potential partnerships with firms like Groupon, too.
The e-commerce applications will extend to banking.
So, the social media sector is hot. Snap is getting a huge valuation, even though it loses money and investors are concerned about its growth rate. The next company likely to cash in on the IPO market, based on size and features, is Viber.