Major banks take lead as Snapchat gears up for March IPO

13 Oct 20166 Shares

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Snapchat. Image: Wachiwit/Shutterstock

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Morgan Stanley and Goldman Sachs have been picked by Snapchat to lead its IPO which, according to growing reports, could come as early as next March.

Valued at $18bn after its most recent funding round (2013), Snapchat’s owners Snap Inc. hope to float the company at around $25bn when it heads for IPO next year.

Snapchat

The new valuation is apparently made more attainable by the company choosing Morgan Stanley and Goldman Sachs to run the show.

Beyond those two financial institutions, JPMorgan, Deutsche Bank, Allen & Co., Barclays, and Credit Suisse will be joint book-runners.

Snap, which is outpacing Twitter at a phenomenal rate and appears to be inspiring rivals like Facebook and Instagram with ideas, could be one of the most exciting stock market debuts in years.

With 150m unique daily active users over Twitter’s 140m, the ephemeral social network is understood to be projecting revenues of $1bn in 2017, up from $350m estimated for 2016.

The company was founded in Stanford University by Evan Spiegel, Bobby Murphy and Reggie Brown, while they were students.

Snap began under the name Picaboo, inspired by the concept of messages that would disappear, hence the ghost logo for the company.

Last year, Snap branched into the world of news and live stories, making it a credible new platform for astute publishers.

Their partners range from Sky to Condé Nast, hoping to reach out to a new generation of teens and 20-somethings who view the original social networks like Twitter and Facebook as something for a more mature market.

In recent weeks, the company showed just how fast it is moving when it revealed a foray into hardware with its new Spectacles glasses.

Snapchat. Image: Wachiwit/Shutterstock

Gordon Hunt is a journalist at Siliconrepublic.com

editorial@siliconrepublic.com