Snapchat’s parent company Snap is seeking $3 billion (approximately Rs 20,191.50 crore) in its Initial Public Offering, the details of which were published on Thursday. Snap may seek a market valuation of $25 billion (approximately Rs 1.68 lakh crore) and will use the proceeds of its IPO – which is planned for March – for corporate purposes, which may include acquisitions, Bloomberg reported on Thursday.
While positioning itself as a company seeking to develop a strong advertising business around their products through strong engagement, Snap also warned of challenges such as slowing user growth and competition from other companies such as Facebook, Google and Twitter. “We have a short operating history and a new business model, which makes it difficult to evaluate our prospects and future financial results,” it said in its prospectus.
The company said that its strategy would include “focus on innovation and taking risks to improve” its products. Snap posted a net loss of $515 million (approximately Rs 3,467.23 crore) and recorded $404 million (approximately Rs 2,719.93 crore) in revenues in 2016. Company co-founders Evan Spiegel and Robert Murphy, who each own 227 million shares, are expected to become multibillionaires by the end of the IPO, AP reported.
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