Snapchat has filed for an initial public offering, sources familiar with the situation said on Tuesday, which puts the messaging app one step closer to the biggest U.S. stock market debut since 2014.
The Venice, California-based company could go public as soon as March and be valued at $20 billion to $25 billion, making it the largest IPO since Chinese e-commerce giant Alibaba went public two years ago valued at $170.9 billion. It would be the largest U.S. technology IPO since Facebook’s debut in 2012 with a value of $81.2 billion.
Snapchat filed with the Securities and Exchange Commission under the U.S. Jumpstart Our Business Startups Act. Companies with less than $1 billion in revenue can secretly file for an IPO, allowing them to quietly test investor appetite while keeping financials confidential.
The filing was made before Republican Donald Trump’s unexpected victory in the U.S. presidential election on Nov. 8 which has increased uncertainty in global markets, but the Dow Jones Industrial Average has hit record highs for four straight sessions.
The sources asked not to be named because the information is private. A spokesman for Snap Inc, Snapchat’s parent company, declined to comment.
Reuters was first to report news of the confidential filing.
A Snapchat IPO is seen by many investors as a bellwether for many of the largest so-called “unicorns,” private, venture-backed companies that are valued at more than $1 billion. Nicknamed “decacorns,” these companies are valued in the tens of billions of dollars and include Snapchat, car-sharing company Uber and home-sharing company Airbnb. No decacorn has yet tested the public market, and it is unproven whether they can beat or even replicate such astronomic valuations with more scrutinizing public investors.
The market for technology IPOs fo this year has been rocky, with investors left skittish due to volatile technology stock performance and uneven returns from recent IPOs. Year to date, 123 U.S. technology companies have gone public, raising $7.1 billion, a 58 percent decline in proceeds and 20 percent drop in the number of offerings from this time last year.
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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 percent of whom are aged 13 to 24, making it an attractive way for advertisers to reach millennials.
