Sources familiar with the matter have confirmed that Snap Inc, the parent company of the Snapchat platform, may push ahead with plans for a public listing as early as March next year. With some estimating that an IPO could value Snap as high as $25bn, the float will likely become one of the biggest tech listings since Chinese e-commerce giant Alibaba Group Holding made its $168bn public debut in 2014. Snap would also be the first in a group of keenly watched and highly valued venture-backed tech companies, which also includes the likes of Uber and Airbnb, to dip its toes into the public market.
Advertising drives growth
Snapchat currently boasts around 150 million daily active users around the globe, 60 per cent of whom are aged between 16 and 23. The app offers a lucrative platform for millennial-targeted advertising, and revenues at Snap have burgeoned since the company introduced slotted and integrated advertisements into the app in 2014. Earlier this year, the company reported to investors that it expected to reach between $250m and $300m in turnover this year, and as much as $1bn in 2017. The company’s most recent valuation sat at $17.1bn.
Confidential filing
Snap filed for the IPO with the Securities and Exchange Commission under the US Jumpstart Our Business Startups Act, which grants confidentiality to IPO filings from companies with less than $1bn in annual revenues. The secret filing process allows companies to discretely test investor appetite without publicly revealing their financials. Representatives for Snap have as yet declined to comment on the prospective listing.
Sources: Wall Street Journal; Reuters; Bloomberg; The Fashion Law
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