View all newsletters
Receive our newsletter - data, insights and analysis delivered to you
  1. Technology
February 3, 2017

Snap Inc finally files for IPO and pledges $2 billion to Google Cloud

Snap Inc. has publicly filed for it's IPO which is expected to to take place next month.

By Joe Clark

Snap Inc. has publicly filed for IPO.

The parent company of photo messaging service Snapchat is set to be one of the biggest public offerings in recent years.

The business has an estimated value of between $20 billion and $25 billion and hopes to raise $3 billion through it’s IPO.  Despite this estimate the company said: “We have incurred operating losses in the past, expect to incur operating losses in the future, and may never achieve or maintain profitability.”

The messaging service began in 2011 and since then has grown to 158 million users per day, though the company is yet to turn a profit.

In 2016 the company’s net loss was $514.6 million despite a revenue of $404 million, this follows on from a net loss of $373 million in 2015. However 2015 revenue was just $58.7 million, meaning a growth of nearly 600%.

Snapchat

The offering is expected to take place next month but it may be the first IPO in US history that does not grant voting rights to investors, according to the IPO filing.

Content from our partners
How to turn the evidence hackers leave behind against them
Why food manufacturers must pursue greater visibility and agility
How to define an empowered chief data officer

Snap said: “Our two co-founders have control over all stockholder decisions because they control a substantial majority of our voting stock.

“We are not aware of any other company that has completed an initial public offering of non-voting stock on a US stock exchange.”

“We therefore cannot predict the impact our capital structure and the concentrated control by our founders may have on our stock price or our business.”

Snap also revealed it’s intention to spend $2 billion on Google Cloud over the next 5 years, the company stated that Google Cloud was a risk factor and it was in their best interests to contribute.

In a statement they said: “Any significant disruption of or interference with our use of Google Cloud would negatively impact our operations and our business would be seriously harmed.”

“If our users or partners are not able to access Snapchat through Google Cloud or encounter difficulties in doing so, we may lose users, partners, or advertising revenue.”

Snapchat’s revenue is generated mostly from ads, and the company has recently approached major advertisers to increase their spending over the next few years. It’s younger user base, primarily 13-24, makes it an attractive prospect, especially as younger people move away from Facebook.

After the failure of it’s ‘Slingshot’ program, Facebook recently launched it’s new ‘Facebook Stories’ service which largely mimics one of the features that made Snapchat so popular.

Topics in this article: , , ,
Websites in our network
Select and enter your corporate email address Tech Monitor's research, insight and analysis examines the frontiers of digital transformation to help tech leaders navigate the future. Our Changelog newsletter delivers our best work to your inbox every week.
  • CIO
  • CTO
  • CISO
  • CSO
  • CFO
  • CDO
  • CEO
  • Architect Founder
  • MD
  • Director
  • Manager
  • Other
Visit our privacy policy for more information about our services, how New Statesman Media Group may use, process and share your personal data, including information on your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.
THANK YOU