A huge sale of shares has moved closer as Snap Inc – the owner of mobile messaging service Snapchat – started a marketing campaign to convince investors to buy its shares when they go on sale in March.
The service is very popular with young people and Snapchat is making much of its rapidly growing number of active users and aggressive expansion plans.
Snap is looking to raise $3 billion (2.8 billion euros), but potential investors could be put off by its widening losses – more than half a billion dollars last year – and the fact that owners of shares will have no say in how the firm is run.
Existing investors will have one vote for each of their shares, while new investors will have no voting rights.
This would be the biggest initial public offering of shares in a technology company since Alibaba, the Chinese internet retailer which raised $25 billion two years ago.
Before that the largest was Facebook, which sold $16 billion worth of shares in 2012.
Snapchat’s userbase is far smaller than Facebook, which also earns much more revenue per user.
It generates the majority of its revenue from advertising, seeking to challenge the dominance of internet giants such as Facebook and Alphabet’s Google.
Snapchat IPO won’t spark a gold rush via
axios</a> <a href="https://t.co/gwT9wFbCp3">https://t.co/gwT9wFbCp3</a></p>— Dan Primack (danprimack) January 24, 2017
- Daily active users averaged 158 million at the end of December 2016, up 48 percent year-on-year
- Net loss widened to $514.6 million in 2016 from $372.9 million the year before
- Potential total valuation – $20 billion to $25 billion
- Sales in 2016 were $404.5 million, up from $58.7 million in 2015
- Number of employees – 1,859, up from 600 in 2015
- Biggest losses are ‘hosting fees’ to cloud computing companies to store its data. It will pay Google $2 billion over the next five years to use its cloud computing services.
the the only explanation I’ve ever seen of how to actually use snapchat is buried in its IPO filing pic.twitter.com/FKCaizd0xF— John Lagomarsino (@johlag) February 2, 2017
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