Snap, the US-based owner of social media app Snapchat, filed yesterday to raise up to $3bn in an initial public offering that will give exits to several corporate investors.
Snap, which counts e-commerce firm Alibaba and internet groups Tencent and Yahoo among its investors, will float on the New York Stock Exchange.
The flotation is expected to take place next month and to value the company at about $25bn. It would be the biggest IPO for a technology company since Alibaba raised $25bn in 2014.
Founded in 2011 as Snapchat, Snap made its name as a visual-based instant messaging app that enabled users to send pictures that would disappear after a short time. It subsequently expanded to video and text-based chat, and currently has some 158 million daily active users.
The company’s revenue generally comes from advertising, and the greater thrust in that direction is reflected by figures that show its 2016 revenue jumping to almost $405m from $58.7m the year before. It posted a net loss of nearly $515m for 2016, compared to $373m in 2015.
Interestingly, Snap describes itself in the IPO filing as a camera company that aims to reinvent the camera in order to “improve the way people live and communicate,” indicating it may add extra hardware to the head-mounted camera, Spectacles, it launched in late 2016.
Snap has raised about $2.6bn in funding altogether, with Alibaba investing in a $1.8bn series F round that closed in May 2016 at an $18bn valuation, and which included Fidelity, York Capital, Glade Brook Capital, General Atlantic, Sequoia Capital, T. Rowe Price, Lone Pine Capital, IVP and Coatue Management.
Yahoo had taken part in a $485m round in early 2015 while Tencent led a $200m round closed in 2013 at a $2bn valuation. Other investors include Lightspeed Venture Partners, Benchmark Capital, Kleiner Perkins Caufield & Byers, GIC, August Capital, General Catalyst Partners and SV Angel.
Venture capital firms Benchmark Capital and Sequoia Capital are the company’s largest shareholders, with stakes sized at 12.7% and 8.3% respectively. No other backers have stakes of 5% or more.
A total of 24 banks are taking on underwriting duties for the offering, but Morgan Stanley and Goldman Sachs are serving as representatives.