In May earlier this year, Snap secured around $1.8 billion valued it at around $18 billion — and now looking to raise further $4 billion in its planned IPO by next year.
Valuations can vary in the lead-up to an IPO as companies may try to temper expectations among investors, while others on the deal are more likely to promote higher numbers.
On Wednesday, sources informed Bloomberg of the company’s plan, but the exact timing of the filing hasn’t been made — likely next year. If things change enough, it’s said that Snap’s valuation could jump to $40 billion.
Raising that much money wouldn’t be outlandish for a company like Snapchat, however. Facebook, in its IPO, raised around $16 billion, while Twitter raised around $1.8 billion. Obviously the former has proved to be more successful than the latter, but if Snapchat can capture early interest and raise a large amount of capital, it can get ahead of future potential waning interest.
Raising that much money is also important to work on its hardware plans, like its Spectacles sunglasses, and making large acquisitions like its reportedly $100 million acquisition of Bitstrips.