HomeFT SelectSnap sets valuation as high as $22.2bn

Snap sets valuation as high as $22.2bn

The owner of the messaging app Snapchat has set its valuation as high as $22.2bn ahead of its initial public offering, less than the company had originally hoped for but still putting it on track to be one of the US’s largest tech flotations.

A price range of $14 to $16 a share, revealed in an updated regulatory filing on Thursday, puts Snap’s valuation in a range of $19.5bn to $22.2bn.

However, the company had previously aimed for a valuation of as much as $25bn, in listing documents published earlier this month.

Snap will start its investor roadshow next week, with presentations in London, New York and Boston, followed by San Francisco on February 27, according to a document sent to investors and obtained by the Financial Times.

Final pricing is expected after the market close on March 1.

Snap’s listing documents said the IPO would be the first to issue shares with no votes, reserving the power over all major decisions and appointments for co-founders Evan Spiegel and Bobby Murphy.

The move means Mr Spiegel, chief executive, and Mr Murphy, chief technology officer, are set to control the company and make decisions about acquisitions even if they stand down from those roles.

That detail has been decried by investors, including a dozen of the US’s biggest pension funds, and stands in stark contrast to other mega IPOs in the tech sector.

Both Mr Spiegel, 26, and Mr Murphy, 28, are set to become billionaires when the company lists.

The Los Angeles-based messaging app’s IPO is also expected to boost the southern California city’s status as a growing tech hub to rival Silicon Valley.

Bobby Murphy, Snap chief technology officer, left, and Evan Spiegel, chief executive, will continue to control the company even if they step down © Bloomberg/AP

Snap’s IPO is eagerly anticipated following a particularly quiet period for US listings, as many firms have instead looked to raise large amounts of capital privately. Snap raised $1.8bn in a new round last year from investors including Sequoia Capital and T Rowe Price.

In its listing documents, Snap, which allows users to exchange images which disappear after seconds to form conversations, defined itself as a camera company.

The company is pushing to sell its video ads and sponsored filters, but is facing a triple challenge of slowing user growth, increasing losses and stiffer competition from the likes of Facebook-owned Instagram.

Snap made a net loss of $515m in 2016 amid growing costs.

More on Snap IPO

● John Gapper: Be wary of Snap’s charms
● News: Offer of voteless shares riles investors
● Lex: Snap as clickbait
● Analysis: Unconventional IPO will test staid investors
● FT View: Snap’s royal share structure

Via FT

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