The mooted Snapchat stock market float is advancing according to reports which say a filing has now been made for what could be a US$25bn IPO in the United States.
Snap Inc, the parent company for the picture and video sharing app, is said to have filed for the stock market listing before Donald Trump’s election to the White House, and the market debut could come as soon as March.
The filing can be kept under wraps in the United States, where firms with less than US$1bn of revenue are allowed to carry out the process confidentially to test investor appetite.
Rise of the Decacorn
Snapchat’s reported US$25bn IPO would, if completed, mark the first listing of a so-called ‘decacorn’.
This millennial term is derived from the somewhat cutesy ‘unicorn’ tag given to describe the once rare venture-capital backed Silicon Valley start-ups that are valued in excess of US$1bn – in other words a decacorn is a start-up that’s at least ten times bigger.
Uber and Airbnb, which are both still privately owned, are also in the decacorn club.
Snapchat has come a long way
Having started as something of a novelty app Snapchat has matured and grown to become one of the most used social media apps.
Its user base exceeds 100mln active users with the vast majority in the key youth age bracket between the ages of 13 to 24. Commercially the group is working to build an advertising base around this harder to reach demographic.
Snapchat’s valuation has rocketed in the past three years, since Facebook’s Mark Zuckerberg made a US$3bn tilt at the app-maker.
More recent pre-IPO funding rounds saw Snap Inc valued between US$20bn and US$25bn.
The app itself is quite simple, yet it is very sticky – figuratively speaking – among its user base.
Users take a pictures or record short video clips, attach a short message and then send to other users. These clips are typically ‘live’ for a matter of moments before disappearing.
Cartoonish filters – which for example add bunny ears, a dog’s nose, or even glittery rainbow vomit – which overlay video has added to the apps appeal, and have spawned countless internet memes.
Most of the investor community may well be scratching their heads at what Snapchat actual is, what its purpose is and just why it is so popular – but with 100mln users and a supposed US$25bn IPO value there’s plainly plenty that see the appeal.
Story by ProactiveInvestors