Snapchat, with its 26-year-old founder Evan Spiegel, is set to bring out its Initial Public Offering (IPO) with the bankers in March 2017, sources familiar with the matter informed Bloomberg.
According to media reports, Morgan Stanley and Goldman Sachs Group Inc. will lead the offering, while JPMorgan Chase & Co., Deutsche Bank AG, Allen & Co., Barclays Plc and Credit Suisse Group AG will also be involved as joint book runners.
The company recently renamed itself to Snapchat Inc, and has private market value of $18 billion after its last funding round. It will be the largest social media IPO since Twitter Inc. in November 2013.
While larger start-ups like Uber Technologies Inc. (last valued at $68 billlion) and Airbnb Inc.(last valued at $30 billion) stay cautious borrowing money or raising private capital, Los-Angeles based Snap is all set to go public.
The benefit for Snap is that since its revenue is less than $1 billion, it qualifies to file IPO documents confidentially with the U.S. Securities and Exchange Commission.
Morgan Stanley's lead role comes after the bank arranged a credit facility for Snap in September. Snap's sale is poised to be the biggest U.S. technology IPO that Morgan Stanley has served as left-lead adviser since Facebook Inc. went public in 2012.
Snapchat is an application for sharing selfies and videos, watching news videos and chatting with friends. It has more than 150 million daily active users, as just over 40 percent of Americans aged between 18 to 34 are Snapchat users.
In a report of The Guardian, analysts at eMarketer recently said the company could bring in advertising revenue of almost $1bn by 2017, as brands ditch traditional advertising models for new media that appeals to younger people.
In a report of Reuters, it clearly brought to notice that the U.S. IPO market has been unfriendly to technology companies for most of 2016. Year to date, technology IPOs have raised roughly $2.3 billion, compared to $5.2 billion over the same period in 2015. But a recent string of such IPOs has instilled more confidence among investors.
No one from the parties involved was available to comment to Bloomberg's report, who first broke the story.
