Snapchat Reportedly Looking To Go Public
According to a Wall Street Journal report, Snap Inc., the newly renamed parent company of Snapchat, is considering launching an Initial Public Offering (IPO) by early next year, which could see the company being valued at around $25 billion.
The report claims that the company is working on the paperwork but there are no guarantees that the share listing will happen as per the schedule or if the valuation will remain the same.
The IPO if it goes through will be one of the biggest in the tech industry as reported by Gizmodo. Twitter was valued at $14.2 billion when it was listed while LinkedIn was valued at $4.25 billion when it had its IPO in 2011. It
The latest projection for Snap puts it far ahead of these valuations, which experts say lies in its ability to generate higher revenues and build a stronger user base. It, however, is far less than Facebook's historic $104 billion valuations during its IPO in 2012.
A Techcrunch report points out that Snapchat had most recently raised $1.8 billion in a venture financing round this March. The app currently has over 150 million daily users and according to documents available with Techcrunch the company was projecting that it could generate revenue up to $1 billion in 2017. In 2016, Snapchat is estimating that it will produce revenues in the range of $250 million and $350 million.
With its latest launch Spectacles, Snap is indicating that the company is interested in stepping into new products and segments, which could require significant investments in research and development. Additionally, the company might need funding to make acquisitions speed up its product development plans, like its reported acquisition of Bitstrips, the makers of Bitmoji earlier this year.
Although the valuation of $25 billion is speculative, Snapchat's strong performance in user and revenue growth has vaulted it into the top spot and has turned it into a key competitor for Facebook which will reflect in a high valuation.
