Snapchat eyeing $25 billion IPO

Oct 08, 2016, 00:50
Snapchat eyeing $25 billion IPO

Snap, Inc.is reportedly preparing an IPO that will value the company formerly known as Snapchat, at around $25 billion.

Citing people familiar with the matter, the Wall Street Journal noted that there was no guarantee the company will proceed with a share sale in March or what its valuation might end up being. When LinkedIn conducted its IPO in 2011, the professional networking website had a value of $US4.25 billion ($5.6 billion).

Some 95% of Snapchat's revenues are expected to come from the U.S. this year, with that share shrinking to 75.0% by 2018 as it expands to other markets.

Underpinning Snap's valuation is the company's dramatic revenue growth since it first started running advertisements in 2014. He said at a conference previous year that Snap has "a plan" to do so.

In an interview with Adweek in 2015, Snapchat CEO Evan Spiegel outlined what he saw as some advantages his company has over its competitors when it comes to advertising.

The company told investors earlier this year that it anticipated revenue as high as $350 million for 2016, and up to $1 billion next year, the Journal report said. Earlier this year, a pitch deck for Snapchat's Series F round of funding obtained by TechCrunch revealed that Snapchat has posted sizable increases in both user numbers and revenue forecasts.

Standing in stark contrast to struggling social networks like Twitter, Snapchat is presently making more money than it can count. Snap could bring in close to $500 million in revenue this year, nearly 10 times as much as last year.

Snapchat is the social media platform of choice for the 18 to 24-year-old demographic, and boasts about 150 million daily active users.

Recently Vodafone also said it will continue with its preparation to launch its initial public offer (IPO) in India.

The company recently rebranded itself and released its first hardware offering called Spectacles.

In May, Snap made it on the list of the top five most valuable privately held startups worth over $1 billion, with company's worth surging to almost $18 billion.

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