Snapchat is just one of many tech companies worth billions of dollars that has never turned a profit. Instead, these startups pour money raised from investors back into growth, losing money yearly.
But while startups frequently aim to convince investors that they’re the next Facebook or Amazon, such success stories are rare, and questionable paths to profitability can doom startups. WeWork’s attempt at going public in September failed after investors were unconvinced by the company’s plan to turn around its cash-burning trajectory. Nonetheless, investment data shows that backers are increasingly willing to support startups that remain unprofitable for long periods of time.
SNAPCHAT
Year founded: 2011
Current valuation: $21.7 billion
Net loss in 2018: $1.3 billion
Uber
Year founded: 2009
Current valuation: $50.4 billion
Net loss in 2018: $1.8 billion
Year founded: 2009
Current valuation: $10.9 billion
Net loss in 2018: $63 million
While Pinterest has never had a profitable year, it did achieve profitability in the third quarter of 2019, it noted in a shareholder letter.
Spotify
Year founded: 2006
Current valuation: $25.8 billion
Net loss in 2018: $78 million
Tesla
Year founded: 2003
Current valuation: $59.3 billion
Net loss in 2018: $976 million