Quickly — like a Snap — before investors miss it: Snapchat is filing for an initial public offering. Rumors are murmuring that the Snapchat IPO may hit the stock market as one of the biggest since 2014.
According to Reuters, Snapchat has plans to go public as soon as March and may be valued at somewhere between $20 billion and $25 billion. If rumors become truths, the Snapchat IPO will be the largest global offering since Alibaba’s nearly $171 billion two years ago and the largest American offering since Facebook’s $81.2 billion four years ago.
Under the Securities and Exchange Commission’s U.S. Jumpstart Our Business Startups Act, if a company is pulling in revenue under $1 billion, it can discretely file for an IPO. This allows the company to test the investor market at a hushed level, keeping financials on the down-low.
And that’s just what Snapchat did. Interestingly, the filing was made right before the U.S. election.
If you’re not on Snapchat, 100 million others are. Of those millions, about 60 percent are millennials between the ages of 13 and 24. The platform is especially attractive to advertisers hoping to catch the eyes — and dollars — of this demographic. The app is free for users and allows them to send photos that disappear soon after they’re viewed.
In May, Snapchat raised more than $1.8 billion through venture funding, valuing it at $20 billion. However, there is some concern from investors that advertising sales are the sole source of revenue.