According to people familiar with the matter, in its planned initial public offering, Snapchat will seek to raise as much as $4 billion.
Asking not to be identified as the details aren’t public, the sources said that the IPO could value Snapchat at about $25 billion to $35 billion. They said that the size of the IPO may change as no final decision has been made. The valuation could reach as much as $40 billion.
As s companies may try to temper expectations among investors, while others on the deal are more likely to promote higher numbers, valuations can vary in the lead-up to an IPO.
Snapchat aims to sell shares in the first quarter of next year, people familiar with the plans said earlier this month and the company has recently changed its corporate name to Snap Inc., is preparing filings for a listing. It plans to file IPO documents confidentially with the U.S. Securities and Exchange Commission since the company’s revenue is less than $1 billion.
A representative for Snapchat declined to comment.
After a slow 2016, he stage for a resurgence of technology listings could be set by a Snapchat IPO early next year. According to data compiled by Bloomberg, the fewest for seven years, just nine technology companies have priced U.S. IPOs this year. Doubling more than doubled in value since its trading debut, Twilio Inc., raised $172.5 million in June and is the biggest among them.
The Match Group Inc., the online-dating powerhouse that owns Match.com, OKCupid and Tinder, went public at a valuation of $2.9 billion in November 2015 and is the last buzzy consumer-tech listing in the U.S.
Giving Goldman Sachs Group Inc its biggest advisory role on a technology IPO since it led Facebook Inc.’s tumultuous listing more than four years ago, Snapchat chose Morgan Stanley and Goldman Sachs Group Inc. to lead its offering. Also be involved as joint book runners are JPMorgan Chase & Co., Deutsche Bank AG, Allen & Co., Barclays Plc and Credit Suisse Group AG.
An n application for sharing selfies and videos, watching news videos and chatting with friends is made by the Los Angeles-based company. Its IPO would be the biggest of a social media company since Twitter Inc. sold shares in November 2013 as after its last funding round, Snap’s private market value reached $18 billion.
A media platform that advertisers are starting to take seriously is the latest image of the app which has matured from a destination for sending silly annotated selfies. Channels where news partners can create mini mobile magazines have been built by the company in the past year. Snapchat also compiles its users’ short videos into live coverage of events around the world.
Like sponsored lenses – the different filters that go on top of people’s selfies designed by brands, Snapchat has pioneered some new forms of advertising. Up from $59 million in 2015, Snap aims to generate more than $350 million in advertising revenue this year, up from $59 million in 2015. Twitter is expected to make bring in more than $2 billion this year.
(Adapted from Bloomberg)