Snapchat Preparing for IPO for March, Valuing Company at $25 Billion

Snap Inc, which operates the photo-sharing app Snapchat, is reportedly working on an IPO that would value the firm at $25 billion. If the plan moves forward, Snap Inc would become the largest company to go public on NYSE since 2014, when Chinese company Alibaba Group Holding Ltd. (NYSE: BABA) went public and valued at $168 billion.

Snap Inc, which formerly called Snapchat, operates the app Snapchat. The pictures, videos and messages sent by users would disappear in seconds. According to a technology website, the company worked with investment bankers for the IPO to be at the end of this year or early next year. Wall Street Journal said Snapchat will go public as early as late March.

Snap Inc declined to comment on its plan to go public. “We aren’t going to comment on rumors or speculations about any financing plans or alternatives,” a spokesperson of Snapchat said.

In 2015, the company’s revenue was only $60 million. Earlier this year, the company expected its revenue to be between $250 million and $350 million in 2016, and $1 billion next year, which means that it planned to price its IPO at 25x its estimated revenues.

According to people familiar with the matter, Snap hasn’t hire any banks for S-1, the public filing. Imran Khan, the chief strategy officer, is in the team of preparing the paperwork for IPO. Snap Inc also raised around $2.4 billion from investors in private markets, including Fidelity Investments, Lightspeed Venture Partners, and Benchmark.

The company also said that it would released a new product, sunglasses that are equipped with wireless video camera. This would be company’s first hardware product and part of its transformation plan.

Leave a Comment