The company is looking to raise up to $4 billion in its planned IPO, valuing the company between $20 billion and $25 billion — less than the $35 billion previously touted by some analysts. Nonetheless, the new estimates would still make Snap the biggest company to go public on the U.S. exchange since 2014, when Chinese ecommerce giant Alibaba Group Holding Ltd. debuted at $168 billion.
Companies with less than $1 billion in revenue can secretly file for an IPO, allowing them to keep their financial details confidential. Snap’s most recent valuation, estimated to be around $17.8 billion, came in the wake of a $1.8 billion funding round in May.
As previously reported, Morgan Stanley and Goldman Sachs will lead the offering. The former may have nabbed the job thanks to its involvement in securing a credit line for Snapchat last month, boosting its spending power as a result. JPMorgan Chase & Co., Deutsche Bank AG, Allen & Co., Barclays PLC, and Credit Suisse Group AG will also participate as joint book runners.
“We aren’t commenting on rumors or speculation regarding any financing plans,” a spokesperson for Snap Inc. told Digital Trends. Snap has never denied plans to go public. Last year, the company’s CEO Evan Spiegel confirmed an IPO was on the cards, referring to it as “another dot on the list of things to do.”
That list has grown ever longer thanks to the company’s expansion into hardware courtesy of “Spectacles,” video-recording sunglasses that are being cleverly marketed to create buzz. With the announcement of Spectacles came the rebranding of the firm — which now describes itself a “camera company” — from Snapchat (which remains the name of its flagship app) to Snap.
It also launched an ad API (application programming interface), allowing marketers to create optimized content that autoplays in between its users’ stories — the main social sharing format pioneered by the platform. Behavioral targeting capabilities that will see users targeted with ads based on their in-app activity are also being rolled out.
Thanks to burgeoning double-digit growth, which is set to continue next year, the Snapchat app is expected to accumulate 217 million daily users by the end of 2017. Not too bad for a company Facebook tried to snap up for a paltry $3 billion in 2014.
Updated on 11-15-2016 by Saqib Shah: Added news of Snap’s confidential filing for its IPO.
