Snapchat parent secretly files for one of the biggest tech IPOs
SNAPCHAT has filed for an initial public offering, sources familiar with the situation said on Tuesday, which puts the messaging app a step closer to the biggest US stock market debut since 2014.
The Venice, California-based company could go public as soon as March and be valued at $ 20 billion to $25 billion, making it the largest IPO since Chinese ecommerce giant Alibaba Group Holding Ltd.’s went public two years ago valued at $170.9 billion. It would be the largest US technology IPO since Facebook, Inc’s debut in 2012 with a value of $81.2 billion.
Snapchat filed with the Securities and Exchange Commission under the US Jumpstart Our Business Startups Act. Companies with less than $1 billion in revenue can secretly file for an IPO, allowing them to quietly test investor appetite while keeping financials confidential.
The filing was made before Republican Donald Trump’s unexpected victory in the US presidential election on Nov. 8 which has increased uncertainty in global markets, but the Dow Jones Industrial Average has hit record highs for four straight sessions.
The sources asked not to be named because the information is private. A spokesman for Snap, Inc., Snapchat’s parent company, declined to comment.
Reuters was first to report news of the confidential filing.
Awash in venture funding, the company raised $ 1.81 billion in May, which valued it at about $20 billion, media reports said at the time.
But investors worry that Snapchat’s advertising sales, which began last October, is the company’s only significant revenue source.
Snap in September started describing itself as a camera company and earlier this month it debuted its $ 130 video- camera sunglasses. The glasses are equipped with a camera that connects wirelessly to a smartphone to take and send “snaps” — the company’s terms for video and photo messages sent on its app.
A ccording to postings on Twitter, a line of more than 100 people quickly formed in front of a vending machine on a Venice, California, boardwalk where the glasses were being sold.
The company’s investors include General Atlantic, Sequoia Capital, T. Rowe Price and Lone Pine. Previous rounds included Fidelity Investment, Kleiner Perkins Caufield & Byers and Yahoo!, Inc.
Earlier this month, Alphabet Inc’s venture capital arm CapitalG, earlier known as Google Capital, disclosed an investment in Snapchat by adding the social networking firm’s logo to a page on its investment portfolio Web site. —