What are tech entrepreneurs doing

These tech companies are worth billions and not making a profit

At the beginning of this year, Snapchat cracked the 200 million mark with its daily active users - a milestone for the social media startup.

Now, eight years after its inception, Snap - the company that owns the app - is hoping to hit another milestone: it wants to start making profits.

Snap is just one of many tech companies that are worth billions of dollars but not making a profit. Instead, these startups continued to invest the investors' money in their growth, making losses year after year.

Investors hope these companies will one day be profitable, which some startups have done: Facebook made its first profits five years after it was founded, increasing them to $ 6.9 billion last year. Amazon was founded in 1994 and didn't reach profitability until 2001. Until recently, profits were also limited.

But even if startups often try to convince investors that they are the next Facebook or Amazon, such success stories are rare. Questionable strategies to achieve profitability can also be the death sentence for startups. In September last year, WeWork failed with its IPO attempt because investors were not convinced that the company would be profitable for the foreseeable future.

Still, investment data shows that donors are increasingly willing to support startups that remain unprofitable for an extended period of time. A pitchbook report from early 2019 showed that among 100 startups worth more than $ 1 billion that successfully went public, 64 percent were unprofitable.

Here are nine companies that are worth billions when they are not profitable.

These tech companies are worth billions - and don't make a dime of profit

These tech companies are worth billions - and don't make a dime of profit

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  • 1. Snap

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  • 2. Zillow

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  • 3. Square

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  • 4. Uber

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  • 5. Lyft

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  • 6. Pinterest

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  • 7. WeWork

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  • 8. Spotify

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  • 9. Tesla

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