The social media platform will make London its new international home, saying “we believe in the UK creative industries”
Photo credit: Dean Drobot/Shutterstock.com
Having recently been voted the number one European city for innovation, London’s tech scene is certainly one to be admired. And it seems like photo-sharing app Snapchat has taken notice. Not only is it aiming to expand the office it set up in the British capital in 2015 but the startup has also announced that it will make the site its new international headquarters.
While other tech startups like Google and Apple have chosen Ireland as their base, Snap Group Limited, Snapchat’s parent company, is going against the grain and will book revenue from sales made to UK customers in other countries where it has no local offices or salespeople. The move is a huge vote of confidence in the UK’s tech scene, especially after the Brexit vote. A spokesperson from Snap stated that the decision to expand its operations in the British capital was made because London is "a great place to build a global business". "We believe in the UK creative industries," said Claire Valoti, general manager of Snap Group in the UK. "The UK is where our advertising clients are, where more than ten million daily Snapchatters are and where we've already begun to hire talent."
Currently the majority of Snapchat’s 150 million global users reside outside the US but most of its revenue originates in its home country, making it unlikely that the move will initially result in a major tax revenue influx to Britain. However, that may soon change. eMarketer, the advertising group, has estimated that even though only 5% of Snapchat’s ad revenue is currently from outside the US, this may jump to 25% in 2018, amounting to an estimated £363m.
This year is set to be a busy one for Snap as the company is gearing up for an IPO in 2017 at a valuation of up to $25bn, although a recent lawsuit has threatened to throw a monkey wrench into the public offering. A former employee has accused the company of inflating its metrics to attract investors – an accusation that Snap told TechCrunch had “no merit”, claiming they were “totally made up by a disgruntled former employee”.
Still, given that Balderton, the venture capital firm, has recently released research suggesting that Brexit could threaten Britain’s position as innovative top dog, it’s encouraging to see companies like Snap believing in Blighty’s potential.