Snapchat, the super popular ephemeral messaging app, is planning on going public next year and has secretly filed for an IPO. Its parent company, Snap, has not made any official announcement yet.
Snap's move to make the company public comes at a very good time in the U.S. economy. The company has valued itself at $20 to $25 billion, which makes it the largest IPO since Facebook went public in 2012. There has been a shortage of tech companies going public this year, with only 103 companies listing their share in the U.S.
Last year, 165 companies went public and raised about $34.6 billion in proceeds. IPO's and proceeds in 2016 has been the lowest since 2010, according to the Wall Street Journal. However, investors believe that 2017 should see an improvement as Snapchat would push other tech companies to go public.
Snapchat's confidential IPO offer filing was allowed due to the fact that the company made less than $1 billion in revenue. Companies that make below $1 billion in revenue per year can file for an IPO without announcing it. This gives the company the advantage of testing the waters without divulging its financial data.
Reuters also reported that Snapchat is making all the necessary moves to go public, but the process will only be completed around March next year. Over 150 million users are using Snapchat everyday and the company is expecting to make around $350 million in advertising this year. The time is also right for the company to appeal to more users. If the company can attract more revenue through advertising, investors will definitely value it at $25 billion.
New Snapchat Products and Updates
To keep users interested and to grow its user base, Snapchat has to keep updating and adding new tools to its apps. Recently, the company added some cool new Augmented Reality world lenses and other features to the iOS and Android apps. Snapchat also released the $130 "Spectacles" glasses that can record stories and take snaps for you without having to open the app.