Snapchat is likely to come with an IPO soon

Whether it remains private or goes public will have a bearing on how you use it.

There is no doubt that Snapchat is a fast growing company. This implies that in order to keep moving quickly, the company needs a cash bump.

So as to tap this much needed cash, sources familiar with the matter have said that Snapchat is engaging in preliminary talks with investment banks on the possibility of coming out with an initial public offering.

This could happen either in late 2016 or early 2017, if it happens at all. Sources have disclosed that it may not change its current valuation, at the time of the IPO, which is currently $16 billion.

When asked to respond to requests for comments, a spokesperson for Snapchat said, an IPO would hinge on a “variety of factors,” including some which are “beyond our control.”

Earlier, Snapchat’s CEO Evan Spiegel has publicly said that the company “need[s] to IPO,” so it is more of a question of when than if.

One thing it wants to avoid for sure is to follow Facebook, wherein its shares didn’t pop at the required levels which left many investors burnt.

Although, you may not necessarily subscribe to its IPO, when it happens, by itself it is significant since it determines how the service will behave: public companies are under more pressure to turn a profit. For consumers this will mean that they could cut money-losing features as they find more creative ways to make a pile.

You could see your favourite feature vanish, or you could see more ads.

Already you can see the changes in Snapchat: local Stories are being dropped while the number of behaviorally-targeted ads are on the increase.

While the core messaging and video features are likely to be undisturbed, it would not be surprising if other elements undergo change in the near future.


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s