latestnewsonlineFeb 03, 2017Technology News
Snap, the owner of messaging app Snapchat, has publicly filed plans to sell its shares on the US stock market.
The California-based firm is seeking to raise $3bn (£2.4bn) from the share sale, according to reports.
Based on previous investments, the tech firm would be worth between $20bn and $25bn, making it the biggest company to list shares in the US in recent years.
The company was first reported in November to have filed a confidential application for the listing.
Snapchat: Is it really worth $25bn?
The company began in 2011 as a mobile app that allowed users to send photos that vanish within seconds.
It now has nearly 160 million daily users, the listing plans reveal.
The fast-growing firm also said its revenue jumped nearly 600% last year to $404m, largely due to increased income from adverts.
Snapchat is seen as an appealing way for advertisers to reach young people, with over half of its users aged between 13 and 24.
However, heavy costs, including from marketing and research, dragged Snap to a net loss of $515m in 2016, after a loss of $373m the year before.
The firm is yet to make a profit and admits in the filing that it “expect[s] to incur operating losses in the future, and may never achieve or maintain profitability”.
Still, Snap’s stock market listing is set to be the biggest in the US since the launch of Chinese e-commerce giant Alibaba in 2014, and before that Facebook’s $81bn valuation in 2012.
It would also mean a big payout for Snap’s co-founder, 26-year-old Evan Spiegel, who started the business while still at university and is set to remain a major shareholder.
Just over three years ago, he turned down an offer from Facebook’s co-founder Mark Zuckerberg to buy Snapchat for $3bn.
Snap names Facebook as one of several companies it is competing with for users’ attention, along with Twitter and Google-owned YouTube.
However, it is also seen as a fast-growing rival to those major Silicon Valley players.
Under pressure from Snapchat, Facebook has launched new filters and a slideshow feature on its photo-sharing app Instagram.
Keen to show it can make revenue from sources other than advertising, Snapchat rebranded itself as Snap last year, and debuted its video-camera sunglasses called Spectacles.
The kit can connect to smartphones and send video and photos to the app.
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