Snapchat Lands $13.5 Million in Round Led By Benchmark

Don't worry, they'll find a way. Spending money is ridiculously easy, making money, that's hard.

I made a rough estimate what instagram spend on hosting just before FB bought them, and I wouldn't be surprised if that was a few 100K/month. At this scale, and especially AWS, this isn't cheap. If snapchat supposedly does 50 mln imgs/day, their hosting also won't be free.

Also, if they could raise this at a nice valuation, it gives them a nice runway.

While I'm not privy to the specifics of this specific deal, I believe often the point of raising large amounts of capital, is to secure and ensure continued market dominance, in winner-takes-all stakes.

It's usually not the primary goal to innovate new features per se, although that is often what is stated publicly.

Furthermore, when it comes time to exit, a premium will likely be paid, for the competitor in pole position.