Published: Sun, February 05, 2017
Economy | By Melissa Porter

Snapchat files for what could be the world's largest IPO

Snapchat files for what could be the world's largest IPO

Silicon Valley and Wall Street have been salivating for Snap Inc., which owns SnapChat, to go public - and it says today that it plans to do so with a preliminary proxy proposing to raise $3 billion. The IPO reportedly will value Snap at upwards of $25 billion.

In 2016, Snap's revenue was $404.5m, compared with $58.7m the year before.

The company had a net loss of $515 million in 2016, according to its S-1 filing. Growth in daily active users was "relatively flat in the latter part of the quarter ended September 30, 2016", the company said in the filing.

In some ways, Snap does look like Facebook. That's quite a bit lower than Facebook's IPO, which valued the social networking giant at more than $100bn, but it's still a significant valuation that will make Snapchat's IPO the biggest consumer tech IPO by valuation in years. At the time Snapchat had 5m active daily users. According to IPO documents filed on Thursday, Feb. 2, 2017, Snap has lost almost $1 billion in the past two years. The bad news? The company is not yet profitable; in fact it lost a whopping $514.6 million past year.

Snapchat could face new rivals or stiffer competition from apps like Instagram, which has adopted similar features. And although Evan Spiegel and Bobby Murphy founded Snapchat together, it seems that Speigel had been making double what Murphy was. Not only that, the average user opens the app 18 times a day, according to the company's public filing.

Ken Bertsch, CII executive director, said Snap's listing would encourage stock exchanges outside the United States to reconsider their ban on dual-class listings in order to win IPO business.

Currently, Snapchat is losing a ton of money. The level of service provided by Google Cloud may also impact the usage of and our users', advertisers', and partners' satisfaction with Snapchat and could seriously harm our business and reputation.

The one fact Snap wants investors to forget:We'll leave you with this...

The social media app considers itself "a camera company", and believes reinventing the camera is its greatest opportunity to "improve the way people live and communicate". Born in a Stanford University Dorm RoomThe Venice, Calif. -based cloud-based application, whose parent company was born in a Stanford University dorm room in 2010, already has a substantial banking foundation, having raised $2.63 billion in eight funding rounds from 24 investors since 2011.

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