Snapchat parent company, Snap Inc., is reportedly planning an initial public offering (IPO) at a valuation of $25 billion or more, and it could take place as early as March.
According to a new report from a reputable source, Snap Inc. is working on an IPO that would value Snapchat at $25 billion at least, marking one of the highest-profile IPOs in years.
Citing "several people familiar with the matter," The Wall Street Journal (WSJ) reports that the company is readying the paperwork for an IPO looking to sell the shares in late March.
"There is no guarantee the four-year-old Venice, Calif., company will proceed with a share sale on that time frame or what its valuation might be," notes WSJ.
As a reminder, Snapchat, recently rebranded as Snap, soared to glory by allowing users to send ephemeral messages that would disappear in 24 hours. If it keeps the same system and it goes public as planned, it would be the biggest company to hold an IPO on a U.S. exchange since 2014.
Moreover, going public at a valuation of $25 billion or more would also mark a substantial premium over Snap's $17.8 billion valuation from May, when it held its latest funding round.
"Underpinning Snap's valuation is the company's dramatic revenue growth since it first started running advertisements in 2014," adds the WSJ.
Snap's main source of revenue is selling advertisements on Snapchat, mingling them between stories from media partners and video stories from its 150 million daily active users.
The IPO market for the tech scene has been lackluster recently, severely lacking new offerings, and Snap's move would finally fire things up again.
According to one of the sources who spoke with the WSJ, Snap could use some of the money from the IPO as currency for acquisitions in the augmented reality (AR) or virtual reality (VR) fields, which are steadily gaining ground.
As part of the rebranding and transformation from Snapchat to Snap, the company also announced its first hardware product recently, introducing Spectacles sunglasses fitted with a wireless video camera.
The WSJ further reveals that Snap has not hired any banks as it works on its S-1 public filing, but Snap's chief strategy officer, Imran Khan, is part of the team handling said filing. Knan (pictured above) joined Snap in 2015, leaving his position at Credit Suisse Group where he was at the helm of global investment baking and was a "key adviser" on the $25 billion Alibaba IPO.
Snapchat has yet to make any public announcement regarding its IPO plans.