Report: Snapchat eyeing IPO

Report: Snapchat eyeing IPO
© Greg Nash

Snapchat parent company Snap Inc. is drawing up the details on an initial public offering (IPO), according to a Wall Street Journal report.

The IPO could happen as early as late March and could be valued at $25 billion or more, but neither are guaranteed, according to sources who spoke to the Journal.

If the $25 billion valuation makes it to the offering, Snap Inc. would be see largest American tech IPO since Facebook’s $16.01 billion public offering in 2012.

And it would be a significant markup from Snap’s most recent valuation last May of $17.8 billion.

The company initially had little revenue stream but has since found ways to monetize its app via advertising in between its users' own posts and in content it provides in partnerships with brands like ESPN and MTV. It also sells sponsored geotags, which users can overlay on images that they send in the app.

Snapchat is still experiencing rapid growth. In 2015, Snapchat made $60 million in revenue. The company reportedly told investors earlier in the year that it expects this year’s revenue to be in the range of $250 million to $350 million and $1 billion for next year.

The California-based company is starting to branch out beyond the Snapchat app. It recently announced a new product called Spectacles, which are sunglasses that feature a video camera and can connect to the Snapchat app.

Many think Spectacles are Snapchat’s early play into the world of augmented reality. According to a Wall Street Journal source, capital raised from the IPO could be used to move further into that realm.