Snap, the US-based instant messaging company formerly known as Snapchat, as confidentially filed for an initial public offering that will allow several corporates to exit, the Wall Street Journal reported yesterday.
The IPO is expected to value Snap, which is backed by e-commerce firm Alibaba and internet companies Tencent and Yahoo, at between $20bn and $25bn, people familiar with the matter told the WSJ, adding that the filing was made “in recent weeks”.
The flotation could take place as early as March 2017 and the proposed valuation would make it the largest IPO for a technology company since Alibaba itself raised $25bn in a September 2014 offering that valued it at more than $160bn.
Snap operates an image and video-based social media and messaging platform, still called Snapchat, which is responsible for some 6 billion video views each day.
The company has only begun monetising the service recently through advertising, and released its first hardware product, a set of camera-equipped eyeglasses, in September this year, at the same time changing its name to reflect its expanding product focus.
Snap is losing money, according to people familiar with the matter, but had already surpassed the top end of its $250m to $350m revenue target for 2016 and is aiming for $1bn of revenue next year.
The offering will follow roughly $2.6bn of venture funding since Snap was founded in 2011. Snap closed $1.8bn of series F funding at an $18bn valuation in May 2016, securing capital from Alibaba, Fidelity, York Capital, Glade Brook Capital, General Atlantic, Sequoia Capital, T. Rowe Price, Lone Pine Capital, IVP and Coatue Management.
Tencent had led a $200m funding round in 2013 that valued the company at $2bn. Yahoo took part in a $485m round in January 2015, and Snap’s other backers include Lightspeed Venture Partners, Benchmark, Kleiner Perkins Caufield & Byers, GIC, August Capital, General Catalyst Partners and SV Angel.