American company Snap Inc., the makers of social networking app Snapchat, has spent an average of $68 million a month since it went public in 2017. Apparently, if the app continues at this rate, it could run out of money in three years. They would need to start making much more profit to overturn this fate.
It seems like Snapchat has had it bad these past few years. The new updated design, coupled with a delayed update for Android users, affected traffic to the app. Facebook also did not help. They had made some similar features including stories to Instagram that made people have less reason to use Snapchat.
According to financial analysts, there has been a dip in the company’s finances. The company has been spending $68 million monthly since 2017.
Experts believe that Snapchat will need to increase its revenue or cut down on costs to stay sustainable. The app has seen a significant decline in user numbers in the past two years. Daily active users have seen a decline that has run into millions.
This is owing to a buggy Android app, unpopular new update redesign and the Instagram sabotage by Facebook. About 20 executives of the company also abandoned the company since it joining the stock exchange market in March 2017.
The company was founded in 2011 by Evan Spiegel. He became the youngest billionaire in the world at age 26 when Snap began trading.
In early April 2019, Snap held a Partner Summit. The app set out to generate more revenue by increasing social gaming and integrate Bitmoji with third-party publishers.