Going against the financial grain, Snap, the company behind Snapchat, has decided to create its international HQ in the United Kingdom, a major coup for the country post-Brexit.
The Republic of Ireland, The Netherlands and Luxembourg are often highlighted as countries that draw in huge MNCs through attractive tax regimes. No rival EU state seems capable of competing with them.
That’s why tech giants Apple, Amazon, Facebook, Google, Microsoft, Twitter and Uber are all based in this trio of states.
However, Snap, ahead of a potential $25m IPO, has decided against following that well-worn path, instead plumping for the United Kingdom.
In a move that will enhance its current presence in London (75 staff already work there, up from single figures one year ago), the decision is a major result for a country still working out how to progress in a post-Brexit world.
The company will orchestrate all revenues from countries where Snap has no local entity of sales force, according to the Financial Times. This means, for now, French, Australian, Canadian and Saudi Arabian business will all flow through the UK office.
Snap is one of the many expanding US tech companies that have yet to see a profit, though hopes for the company’s primary tool Snapchat seems higher than with many rivals.
With 150m active users, split pretty evenly between the US and the rest of the world, advertising attempts have been numerous and, in some cases, successful. Some expect such revenues to almost triple from 2016’s $350m to nearly $1bn.
“We believe in the UK creative industries. The UK is where our advertising clients are, where more than 10m daily Snapchatters are and where we’ve already begun to hire talent,” said Claire Valoti, general manager of Snap Inc in the UK, to the Financial Times.
In November, Snap’s plans for an IPO became more solidified, with March to offer the expected date with destiny. The $25bn valuation seems very high for a loss-making entity, but it does pale in comparison to previous tech giants such as Alibaba (which was valued at $170bn after an IPO in 2014) and Facebook ($81.2bn in 2012).