Snapchat owner values firm at $25bn for IPO

Snapchat has more than 150 million daily active users. Photo: Bloomberg

Alex Barinka

November 16 2016 02:30 AM

Snap Inc., the parent company of Snapchat, has filed confidentially for an initial public offering, according to people familiar with the matter.

Snapchat filed papers with the US Securities and Exchange Commission before last week's US presidential election, one of the people said, asking not to be identified as the details are private.

The firm is targeting a valuation of $20bn (€18.5bn) to $25bn (€23.3bn) in a listing that could come as early as March, the source said.

No final decision has been made on the size or timing of the IPO, they said.

Last month, people familiar with the matter said the camera-application maker will seek to raise as much as $4bn at a valuation of about $25 billion to $35 billion. One source added that the valuation could reach as much as $40bn.

Valuations can vary in the lead-up to an IPO as companies may try to temper expectations among investors, while others on the deal are more likely to promote higher numbers.

Snapchat has more than 150 million daily active users and aims to generate more than $350m in advertising revenue this year, up from $59m in 2015, people familiar with its plans have said.

Because Snapchat has revenue of less than $1bn, it was able to file IPO documents confidentially.

Under the Jumpstart Our Business Startups Act, companies with smaller revenues can file privately and work out details with the SEC away from the public eye.

A representative for Snapchat declined to comment.

Technology

Snapchat chose Morgan Stanley and Goldman Sachs Group Inc. to lead its offering, people familiar with the details have said, giving the former its biggest advisory role on a technology IPO since it led Facebook Inc.'s tumultuous listing more than four years ago.

JPMorgan Chase & Co, Deutsche Bank AG, Allen & Co, Barclays Plc and Credit Suisse Group AG will also be involved as joint book runners, the people said.

Los Angeles-based Snapchat makes an application for sharing selfies and videos, watching news videos and chatting with friends.

After its last funding round, Snap's private market value reached $18bn, meaning that its IPO would be the biggest of a social media company since Twitter Inc. sold shares in November 2013. (© Bloomberg news)