It’s official, Snap Inc. has finally filed for its IPO. The company has been rumored for some time now to be planning to take the company public and today Snap Inc’s Founder has filed for an IPO worth $3 billion on the New York Stock Exchange. The company, which claims to have 158 million daily active users on Snapchat and will be trading under the symbol “SNAP,” has made it clear that it hopes to become a camera-focused company, instead of one that is centered solely around Snapchat and app development.
Today’s IPO, which values the company at $20 billion, has been backed up with some significant growth in numbers when it comes to Snapchat’s advertising revenue, specifically an increase from $58.7 million in 2015 to $404.5 million in 2016. Unfortunately for the company, though, it is losing significant amounts of money, with the company losing a total of $514.6 million last year. To make matters worse for themselves, though, the company itself doesn’t appear to have much faith in turning over a profit with the company claiming that they “have incurred operating losses in the past, expect to incur operating losses in the future, and may never achieve or maintain profitability.” In addition to this, the company is facing tough competition from the likes of Facebook, who has seen their Instagram Stories feature match the number of active users that Snapchat has in a matter of months, with Snapchat taking quite a while to reach its current user count. This also shouldn’t be that surprising given that Instagram is owned by Facebook who is already much larger than Snapchat.
This isn’t the only problem, though. It appears Instagram Stories is actually stealing Snapchat’s users, so the IPO filing seems to be coming at a time when the company is in need of a cash boost in order to invest in other products. After all, if Snapchat’s user base growth keeps slowing, eventually it could get to the point where it starts shrinking, which could be disastrous for the company if they are still reliant on the app’s revenue stream. If the company uses the money it raises wisely and efficiently, though, the IPO filing could be just what the company needs to jump start a new era for itself, where Snapchat is simply one revenue stream among a wide range of photography-focused products.