SAN FRANCISCO (Diya TV) — Snapchat will seek to raise as much as $4 billion in its planned initial public offering, according to people familiar with the matter.
The IPO could result in a valuation for the company of $25 billion to $35 billion, according to a report from Bloomberg. No final decision has been made and the size of the IPO may change, according to the report. The valuation could reach as much as $40 billion, it added.
Valuations can often vary in the lead up to an IPO as companies may try to temper expectations amongst its investors, while others at the same time often promote higher numbers to build more value.
Snapchat, which recently changed its corporate name to Snap Inc., is preparing filings for a listing and aims to sell shares in the first quarter of next year, it was revealed earlier this month. Because the company’s revenue is less than $1 billion, it plans to file IPO documents confidentially with the U.S. Securities and Exchange Commission.
A Snapchat IPO early next year could set the stage for a resurgence of technology listings after a slow 2016. Just nine technology companies have priced U.S. IPOs this year, the fewest in seven years. The biggest among them, Twilio Inc., raised $172.5 million in June and has more than doubled in value since its trading debut.
The last buzzy consumer-tech listing in the U.S. was in November 2015 when Match Group Inc., the online-dating powerhouse that owns Match.com, OKCupid and Tinder, went public at a valuation of $2.9 billion.
Snapchat has chosen Morgan Stanley and Goldman Sachs to lead its offering, giving the former its biggest advisory role on a technology IPO since it led Facebook Inc.’s tumultuous listing more than four years ago. JPMorgan Chase & Co., Deutsche Bank AG, Allen & Co., Barclays Plc and Credit Suisse Group AG will also be involved as joint book runners, according to the Bloomberg report.
After its last funding round, Snapchat’s private market value reached $18 billion, meaning that its IPO would be the biggest of a social media company since Twitter Inc. sold shares in November 2013.
Snapchat aims to generate more than $350 million in advertising revenue this year, up from $59 million in 2015.