Sources: Snap tried to buy now defunct messaging app Secret for up to $60M, but couldn't agree on price since Secret was valued at $120M in 2014 Series B round
Josh Constine / TechCrunch : Tweets: @joshconstine and @joshconstine Tweets: Josh Constine / @joshconstine : Fun scoop with juicy quotes from sources familiar with the deal. “This was the beginning of the end for Secret” http://techcrunch.com/... Josh Constine / @joshconstine : Snapchat wanted to hire away Secret's product devs to become a Snap “special ops” team, but wouldn't pay more than $60M. Secret also had preliminary M&A calls with Fb & Google http://techcrunch.com/...
Context & Ripple Effects
Secret was already on the way out when this scoop landed: the app went from hyped anonymity play to founders cashing out $6M and shutting down within 16 months, and this reporting fills in the missing chapter — a real acquirer at the table that walked away over price. The $120M Series B valuation became an anchor Secret couldn't sell below, while Snap capped its offer at $60M because what it actually wanted was the product team, not the product.
The failed deal also reveals how crowded the bidding was: Secret had preliminary M&A calls with Facebook and Google alongside Snap, part of a stretch where the big social platforms were shopping for each other's edges — Facebook tried to buy Snow, Naver's Snapchat clone, and Google had explored buying Snap itself.
First-order effects
- Secret loses its most concrete exit path: with Snap unwilling to exceed $60M against a $120M last-round valuation, the team that Snap wanted as a 'special ops' unit stays unacquired and the company heads toward shutdown.
- Snap walks away empty-handed on both product and people, having priced the deal as a talent acquisition while Secret's investors defended their mark.
Second-order effects
- Facebook and Google, already in preliminary talks per the reporting, become the fallback bidders — but the same valuation anchor applies, so the down-round problem follows Secret into every negotiation.
- The episode raises the bar for Snap's next attempts: its later approach to AR startup Blippar before Blippar closed its California office shows it kept hunting for distressed assets, presumably with the lesson that it pays for teams, not for marks.
Third-order effects
- If the pattern holds, high-water private valuations become structural deal-killers in consumer social: founders and investors holding a rich last-round price lose exits to buyers who only value the team, pushing marginal apps toward shutdown instead of acquisition.
- Consolidation around the big messaging platforms shifts from buying products to absorbing talent — a dynamic where the acquirer's discipline on price, not the target's fundraising history, determines who survives.
The trend: Consumer social is consolidating through talent-driven acqui-hires by platform incumbents, with inflated late-stage valuations increasingly standing between struggling startups and any exit at all.