Coatue Management is the mystery investor behind Snapchat’s new $US50 million round of financing.
In fact, it’s the only investor in this round of financing.
This is the second major startup deal Coatue has led; the first was HotelTonight, a mobile hotel-booking application. Coatue also invested in Aaron Levie’s Box, although it didn’t lead the round.
Coatue for Snapchat seems like a head-scratcher. Why did the hottest company in the world — which could have chosen almost any investor from the usual tech venture capital groups — pick a hedge fund?
We called Sam Shank who runs HotelTonight and asked him what Evan Spiegel, Snapchat’s CEO, might be thinking. Shank was in a similar boat a few months ago when Coatue invested $US45 million in his company.
Here’s what ran through Shank’s mind at the time, and why he isn’t surprised to see Snapchat in Coatue’s portfolio.
Shanks says that because Coatue spends a lot of money on investment research, it’s able to spot trends with relative ease. Coatue is particularly well-versed in the public travel sector, so Shank feels it can help guide him as his company grows.
“They were able to see where HotelTonight was going and provide insight to us as well,” Shanks said Coatue. “They have a uniqueness … they’re well-connected and really knowledgeable — they have a whole new pool for us to network in. We met the guys and they were very sharp and smart about looking in the consumer Internet space.”
Shank says he didn’t see the Snapchat deal coming, but he isn’t surprised by the news.
“It’s the hottest consumer Internet company right now and these guys want to be involved in that type of content,” says Shank. “They’re very mobile-focused. If you put together a list of the 20 hottest Internet companies right now, I wouldn’t be surprised if Coatue owned part of a bunch of them over time.”
Coatue manages $US8.5 billion in assets and it recently opened an office on Sand Hill Road in Menlo Park, California.
Thomas Laffont, who runs the venture arm of Coatue Management, told Forbes’ J.J. Colao why he’s excited about Snapchat:
“[Snapchat] has already reached an incredible scale. And what you do on Snapchat is not something you can do on any other communication platform. We think they’re revolutionizing how people communicate in a mobile-centric world.”
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