The social network superstar, Snapchat (Snap Inc.), has filed confidentially to go public, with an eye toward being valued for more than over US$30 billion (RM131 billion). The public was briefed on the matter yesterday, and this would make Snap the third-most-valuable technology company at the time of its market debut, after Alibaba and Facebook.
The four-year-old company, whose Snapchat app allows users to send disappearing messages from their smartphones, was eligible to file its IPO paperwork confidentially because it expects to have less than US$1 billion (RM4.3 billion) in revenue this year. There is no exact date yet as to when the IPO will happen but it is expected to take place early 2017.
Image: The Verge
The company began in 2012 as a mobile app that allowed users to send photos and videos that vanish within seconds to avoid people from saving pictures. The distinctive app has mostly shaken its reputation as a place for sexting and transformed into a major publishing platform.
It now boasts over 100 million daily users, which is more than Twitter. And with 60% of its users aged between 13 and 24, it is seen as an attractive way for advertisers to reach young people. Snap’s founder, a young Evan Spiegel who is only 26-years-old, turned down an offer from Facebook founder Mark Zuckerberg to buy Snapchat for US$3 billion (RM13 billion) just three years ago.
Image: International Business Times
But marketers and ad agencies have been frustrated with Snap’s tight controls on ad content and the long wait times some have experienced getting ads approved by the platform. Snap has been taking some steps to make life easier for advertisers. It released an “application programming interface” that helps advertisers buy ads through a more automated process. Which allows marketers to target customers using email databases and other data sources.
If this goes as planned, it would be the biggest US technology floatation since Facebook’s 81-billion-dollar launch in 2012. In September, the company renamed itself Snap in a bid to show that its ambitions extend beyond Snapchat. As part of the change, it uncovered camera-equipped sunglasses, called Spectacles, that can record video in short bursts.
Image: iTech Post
However, Snap will encounter concentrated scrutiny from prospective investors, as rivals try to encroach on its turf by copying some of the photo messaging service’s signature features. In August, Facebook’s Instagram rolled out its version of the Snapchat Stories photo and video service.