NEW YORK (Real Money) -- Bloomberg reported yesterday that Snapchat is close to raising a new round of financing valuing the company at up to $19 billion. The startup has come a long way since a little more than a year ago, when Facebook reportedly offered $3 billion to buy the company. Jim Cramer's charitable trust Action Alerts PLUS owns Facebook. Read his thoughts in the company's recent earnings here. What's behind this dramatic increase in value? In a word, growth. According to data in the Bloomberg report, Snapchat has increased its reach in monthly active users from 15% of Apple iOS users in the U.S. in January 2014 to almost 30% today. Over that same time, most other messaging apps are flat, while Facebook's Instagram has been growing significantly as well, and is now up to almost a 35% share. So Snapchat is now basically worth what Facebook paid for WhatsApp last year. When you look at the data in the Bloomberg story, it's clear that the introduction of Snapchat Stories at the start of October corresponded to a bump-up in iOS usage, at least in the U.S. I presume that it has seen a similar bump since putting out Discover at the end of January. There's a marked difference in "reach" between U.S. iOS users and Google Android users. U.S. iOS users saw Snapchat's reach increase from 14% in January 2014 to 28% today. Over that same period, U.S. Android users saw Snapchat's reach increase from 16% to 19%. Why the big difference? It must be the same reason why merchants see bigger numbers from iOS users vs. Android or why advertisers are willing to pay so much more to reach iOS users. The iOS users just seem to be more engaged app users. A lot of Android users appear to treat their smartphones like old feature phones just for phone calls. Is there more upside ahead for Snapchat? It would seem so. Around the time of Facebook's IPO, there was tremendous skepticism (including from me) that the company would be able to sustain itself as it transitioned into mobile from desktop. Comparisons were often made between Facebook and MySpace or Friendster. However, in recent mobile-only times, it's been difficult to find examples of leaders who suddenly flop. Instagram gets embraced as the leader in mobile photo sharing and its leadership just goes on and on. Snapchat seems to be on a similar growth trajectory in messaging for the U.S. If you look at the two charts of Snapchat's and Instagram's "reach" over the past year in the U.S. on iOS, they're both trucking along. There are no signs of plateauing. Snapchat is on a path to become a new Facebook of sorts, with the sharing of information and videos among friends in a trusted environment. Now the company is making it into a place to consume news, entertainment and information. If Facebook's worth $200 billion now, early-stage investors are betting that Snapchat can one day grow into that.
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