Snapchat Preparing for IPO that Could Value the Company at US$25 billion

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What: Snap Inc., the parent company of Snapchat,  is said to be working on an initial public offering for March.
Why it matters: The IPO, which may value the company at US$25 billion, could be the largest IPO since Chinese e-commerce giant Alibaba went public.

wesrmsya_400x400Snap Inc., the parent company of Snapchat,  is said to be working on an initial public offering for March that could value the company at US$25 billion, The Wall Street Journal reports.

The March timeline is arbitrary, given uncertainties like the outcome of the presidential election and the state of the capital markets, according to the source. The company hasn't even hired bankers yet, although is expected to do so by December.

This could be the largest IPO since Chinese e-commerce giant Alibaba went public in 2014, sources told The Wall Street Journal.

Last May, the company was valued at US$17.81 billion and received US$3.1 million in advertising revenue for the first 11 months of 2014, Reuters reports.

The company has told investors that it expects to make between US$250 million and US$350 million in advertising revenue this year, according to The Journal.

The company will reach near US$1 billion in revenue in 2017, which means a US$25 billion IPO would be priced at 25 times its projected revenue numbers.

Apparently, the company was looking to go public as soon as later this year or early 2017. Snap's chief strategy officer, Imran Khan, is part of the team that is working on the filing

 


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