Snap Inc., the company formerly known as Snapchat, is pushing ahead with plans for an initial public offering reportedly set for March 2017. The latest news is that the firm aims to raise up to $4 billion in its planned IPO, according to unnamed sources close to the matter who spoke to Bloomberg.
The maker of the popular visual messaging app is busy preparing the paperwork for an IPO that could value the company between $25 billion to $35 billion — the highest estimate currently being reported is a staggering $40 billion That’s significantly higher than Snap’s most recent valuation, which was estimated to be around $17.8 billion in the wake of a $1.8 billion funding round in May.
Morgan Stanley and Goldman Sachs will lead the offering, reports Bloomberg. 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 reportedly participate as joint book runners.
If that estimate turns out to be accurate, it would 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.
“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 its new video-recording sunglasses “Spectacles,” due out in the fall. With that announcement 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. Snap’s predicted revenue for next year is $1 billion, compared to approximately $300 million this year. Not too bad for a company Facebook tried to snap up for a paltry $3 billion in 2014.
Updated on 10-26-2016 by Saqib Shah: Added news of the rumored figure Snapchat plans to raise from IPO, and its predicted valuation.