Snap Inc is catching everyone’s attention with increasing speculation around an IPO

Large IPOs always catch the media’s attention and often if the company IPO’ing transcends the usual interest of the financial markets into the broader public psyche then this is always helpful in drumming up investor interest.

Snap Inc., the company behind the social media app Snapchat, is reportedly preparing for an IPO towards the end of Q1 next year. Experts are speculating that the size of the IPO would value the company at USD 25bn, which would be a pretty phenomenal valuation for a company established four years ago, even for a technology “unicorn”. In fact, it’s potentially so large that the media are already talking about it joining the “Mega Unicorn” club - i.e. venture backed companies with a valuation of over USD 10bn - an elite club represented by companies such as Uber, AirBnB and Dropbox, among others. All of these companies have succeeded in taking a consumer-driven technology offering to a mass market quickly and effectively, creating a loyal and expanding customer base which in turn drives such high valuations.

Should the Snap IPO proceed it will be an intriguing one to follow because it can file its IPO documents privately with the SEC given its revenues are less than USD 1bn, thereby taking full advantage of the 2012 “JOBS Act” and effectively testing out the water by getting feedback from the SEC and selected investors. I have a feeling this won’t be a picture that disappears after 10 seconds!