Snapchat IPO: Snap, Inc. Officially Files, Seek To Raise $3 Billion

Allan Goodman
February 4, 2017

The announcement has been much anticipated and is likely to be one of the largest ever in the technology industry, with the company expected to raise around three billion dollars (£2.4bn) and be valued at between 20 and 25 billion (£16-20bn).

So far, the playful, ephemeral approach has worked: the app has over 158 million active users.

As expected, Snap Inc.

Snapchat said that "substantially all of our revenue comes from advertising" and claimed that the mobile ad market is expected to grow almost three-fold from US$66 billion in 2016 to US$196 billion in 2020.

Snap is targeting a big, growing market. However, not all its business numbers are positive. Although Spiegel made $2.4 million in 2016 (including a base salary of $500,000)-upon Snap's IPO, his salary will be cut to just $1 per year.

CEO EVAN SPIEGEL started the company while an undergraduate at STANFORD UNIVERSITY.

The biggest social media IPO since Twitter is here.

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The US company behind the popular disappearing message service Snapchat is to float on the New York Stock Exchange. In the quarter before it went public, Facebook was profitable and recorded net income of $205 million, down from $302 million in the previous quarter. Engagement was strong, with time spent on the site at 25 to 30 minutes a day per user.

Most recently, with a fast-paced recap/commentary series based on ABC's "The Bachelor", Snapchat has involved into original programming. Last September, they introduced Spectacles, flamboyant $130 smart sunglasses equipped with a video camera that are created to make posting to Snapchat a snap (pun intended). The IPO filing comes at an exciting but challenging time for the company.

"We believe that reinventing the camera represents the best opportunity to improve the way people live and communicate", Snap stated in the SEC filing. And it's already found some success with Spectacles, its fun pair of video-recording sunglasses.

Still, the company has a diverse revenue stream: No single advertiser or content partner accounts for more than 10 percent of revenue, the filing said.

But in more ways Snap's S-1 looks more like Twitter's S-1. Will you be buying Snap stock when it goes on sale?

The firm pointed out: "Our two co-founders have control over all stockholder decisions because they control a substantial majority of our voting stock".

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