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| Snapchat prepares for IPO that could value app at $25bn, reports say Snapchat prepares for IPO that could value app at $25bn, reports say | |
| (about 4 hours later) | |
| Messaging app Snapchat has filed confidentially with the US Securities and Exchange Commission (SEC) for an initial public offering (IPO), sources familiar with the situation said on Tuesday. | Messaging app Snapchat has filed confidentially with the US Securities and Exchange Commission (SEC) for an initial public offering (IPO), sources familiar with the situation said on Tuesday. |
| The filing puts the Venice, California-based company one step further towards its IPO, which sources say could come as soon as March and value it at $20bn to $25bn, making it one of the biggest technology offerings in recent years. | The filing puts the Venice, California-based company one step further towards its IPO, which sources say could come as soon as March and value it at $20bn to $25bn, making it one of the biggest technology offerings in recent years. |
| Under America’s Jumpstart Our Business Startups Act, companies with less than $1bn in revenue can secretly file for an IPO, allowing them to quietly test investor appetite while keeping financials confidential. | Under America’s Jumpstart Our Business Startups Act, companies with less than $1bn in revenue can secretly file for an IPO, allowing them to quietly test investor appetite while keeping financials confidential. |
| The sources asked not to be named because the information is private. A spokesman for Snap, Snapchat’s parent company, declined to comment. | The sources asked not to be named because the information is private. A spokesman for Snap, Snapchat’s parent company, declined to comment. |
| Snapchat started in 2012 as a free mobile app that allows users to send photos that vanish within seconds. It has more than 100 million active users, about 60% of whom are aged 13 to 24, making it an attractive way for advertisers to reach millennials. | Snapchat started in 2012 as a free mobile app that allows users to send photos that vanish within seconds. It has more than 100 million active users, about 60% of whom are aged 13 to 24, making it an attractive way for advertisers to reach millennials. |
| Awash in venture funding, the company raised $1.81bn in May, which valued it at about $20bn, media reports said at the time. | Awash in venture funding, the company raised $1.81bn in May, which valued it at about $20bn, media reports said at the time. |
| But investors worry that Snapchat’s advertising sales, which began last October, is the company’s only significant revenue source. | But investors worry that Snapchat’s advertising sales, which began last October, is the company’s only significant revenue source. |
| Snap in September started describing itself as a camera company, and earlier this month it debuted its $130 video-camera sunglasses. The glasses are equipped with a camera that connects wirelessly to a smartphone to take and send “snaps” – the company’s terms for video and photo messages sent on its app. | Snap in September started describing itself as a camera company, and earlier this month it debuted its $130 video-camera sunglasses. The glasses are equipped with a camera that connects wirelessly to a smartphone to take and send “snaps” – the company’s terms for video and photo messages sent on its app. |
| A line of more than 100 people quickly formed in front of a vending machine on a Venice, California, boardwalk where the glasses were being sold. | A line of more than 100 people quickly formed in front of a vending machine on a Venice, California, boardwalk where the glasses were being sold. |
| The company’s investors include General Atlantic, Sequoia Capital, T Rowe Price and Lone Pine. Previous rounds included Fidelity Investment, Kleiner Perkins Caufield & Byers and Yahoo. | The company’s investors include General Atlantic, Sequoia Capital, T Rowe Price and Lone Pine. Previous rounds included Fidelity Investment, Kleiner Perkins Caufield & Byers and Yahoo. |
| Earlier this month, Alphabet’s venture capital arm CapitalG, earlier known as Google Capital, disclosed an investment in Snapchat by adding the social networking firm’s logo to a page on its investment portfolio website. | Earlier this month, Alphabet’s venture capital arm CapitalG, earlier known as Google Capital, disclosed an investment in Snapchat by adding the social networking firm’s logo to a page on its investment portfolio website. |