Can Snap cash in before Facebook gobbles up all the millennials?

By Oliver Smith 2 March 2017

It's David vs Goliath, but will this put off investors?

Snap is being relentlessly hunted by Facebook.

Over the last 14 months the social networking goliath has  shamelessly copied nearly every feature of Snapchat, through its apps like Messenger, Instagram and WhatsApp.

Now as Snap prepares for a whopping $24bn stock market listing this afternoon, investors are left weighing up whether this David really stands a chance against Goliath.

Read more: Snapchat is about to hit the big time, here’s how millions of Millennials got it there

Snapchat, or Instagram? Stories are now a feature of both social networks.

Copy cat

From humble beginnings Snapchat has grown from a controversial ‘teen sexting app’, into a media giant used by millions of teen and young adults.

We even called Snapchat Stories the “best coverage of the Rio Olympic Games” last summer.

But, after trying to buy Snapchat for $3bn in 2013, last year Facebook woke up to the very real danger posed by this app loved by millions of millennials.

In March Facebook acquired MSQRD, an app that offers digital face masks giving you the ability to swap your face with someone else or apply a filter that totally transforms your face, just like Snapchat’s popular ‘lenses’.

In April Facebook added Snapchat-like QR codes to its Messenger app, letting you easily share them to add new connections, ditto like Snapchat.

In August Instagram added Stories which have been hugely popular, a direct copy of the popular Snapchat format which shows an ephemeral 24 hour timeline of you last public snaps.

Finally WhatsApp has recently added Status, another clone of Snapchat’s Stories, albeit one that hasn’t been yet quite as popular.

Today there’s really nothing left that Snapchat offers which hasn’t been copied by Facebook in some format – maybe that’s why Snap’s latest innovation is a physical pair of sunglasses with a built-in camera and why Snap describes itself today as “a camera company”.

Unfair advantages

With Facebook’s huge scale (1.86bn users) and almost unlimited resources, Mark Zuckerberg has shown there’s really nothing the social networking goliath can’t copy.

Investors eyeing up Snap’s pricey valuation already have enough concerns on their plate, the company saw losses of over $500m last year and is offering up shares that have no voting rights.

Read more: Snap’s $3bn IPO will shut investors out

Snap has a stronghold of ‘millennials’ who love the app, but it has yet to break into the lives of the wider population.

Can Snap really grow into a mass market social network before Facebook’s copy cat tactics crush this plucky upstart? And do investors really want to back David in a seemingly un-winnable fight against Goliath?

Tonight as Snap’s shares are publicly traded for the first time, we’ll get a good idea.