Snapchat company sets IPO valuation target at $19 billion

A smartphone showing Snapchat's discover feature

That would raise about $3.2 billion, and Snap estimates its proceeds from the deal would be $2.1 billion to $2.3 billion.

Snap Inc. set a starting price range of $14 to $16 per share for its initial public offering, which could value the Los Angeles technology company at $19 billion.

Snap, which brings in the bulk of its revenue from advertisements in filters and promoted stories on Snapchat, could use the funds from an IPO for acquisitions of additional virtual-reality companies.

Depending on the outcome of their roadshow - which is set to be held under the "SNAP" ticker - shares for Snap Incorporated could be priced as early as March 1. The schedule shows that after starting in the Mid-Atlantic they will travel to London on Monday, followed by two days in NY.

Snap launched itself in 2012 with an app that sends disappearing messages, rebranded itself a year ago as a camera company and started selling $130 video camera glasses.

"Even I was [surprised] by the slowdown in user growth, and user growth is very important at this stage", said Santosh Rao, head of research at Manhattan Venture Research, a merchant bank focused on the secondary market for late-stage venture-backed technology companies. Snap's revenue climbed about sixfold previous year to US$404.5 million, compared with US$58.7 million in 2015.

Snapchat co-founders Evan Spiegel and Bobby Murphy are about to become billionaires. Owners of class B stock are entitled to one vote per share, which can be converted into a share of class A stock. The class C stock represents 88.5% of the voting power of the outstanding capital stock after the IPO.

The value placed on a possible Snap Inc IPO has varied wildly, but now the company has revealed it will be at least $19.5bn, which would still rival the largest USA tech IPO ever. The filing also shows how the company has evolved over the past few years.

Net losses widened to US$514.6 million from US$372.9 million in that period.

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