Snap Inc., the company formerly known as Snapchat, is working on an initial public offering for March that would value the company at $25 billion, according to The Wall Street Journal.
A source familiar with the matter confirmed the company's IPO ambitions, but told Business Insider that the situation is still "fluid" and that Snap hasn't hired bankers at this point. The March timeline is arbitrary, given uncertainties like the outcome of the presidential election and the state of the capital markets, according to the source.
Bankers say they have been courting Snap for months in anticipation of an IPO. It's seen as best positioned to approach the IPO markets early in the year, one person said, among tech companies expected to float their shares in 2017.
Another source said Snap is expected to choose bankers by December.
Snap declined to comment on its IPO plans when reached by Business Insider.
"We aren't going to comment on rumors or speculations about any financing plans or alternatives," a spokesperson said.
Snap has told investors that it expects to make between $250 million and $350 million in advertising revenue this year, according to The Journal. A recent eMarketer report predicted that the company will near $1 billion in revenue in 2017— meaning a $25 billion IPO would be priced at 25 times its projected revenue numbers.
The company last raised $1.81 billion in private funding in May, which pegged its valuation at between $18 billion and $22 billion.
The Information previously reported that the company was looking to go public as soon as later this year or early 2017.
A $25 billion IPO would be the largest public offering for a tech company since Alibaba went public in 2014 for $168 billion, and would come at a time when the tech IPO market has been in the doldrums.
It would also be a huge coup for Evan Spiegel, the 26-year-old entrepreneur who started Snapchat as a student at Stanford and famously turned down a $3 billion bid from Facebook in 2013.
The path to going public
Spiegel has been clear about his company's plan to go public. "We need to IPO,"he said onstage at the Code Conference in May 2015. "We have a plan to do that."
In the last two years, his ephemeral messaging app has ramped up its advertising efforts, adding sponsored geofilters and animated selfie "lenses," and inserting video ads between users' stories.
In May, a Securities and Exchange Commission filing revealed that Snapchat had quietly added an IPO specialist, Stan Meresman, to its board — an early indicator that the company was preparing to go public. Another key IPO driver is Snapchat Chief Strategy Officer Imran Khan, a former Credit Suisse banker who helped take Alibaba public in 2014.
Beyond adding personnel, Snapchat has evolved from being only a social messaging app to calling itself a camera company.
Most recently, Snapchat rebranded as Snap Inc. and unveiled its Spectacles, which are smart glasses. Spiegel isn't banking on the glasses becoming a significant revenue stream for the company — at least at this stage. The company recently told The Journal that the glasses would have "limited distribution" when they go on sale.
In its announcement, Snapchat said the new name was meant to appeal to public investors. "You can search Snapchat or Spectacles for the fun stuff and leave Snap Inc. for the Wall Street crowd :)"the company wrote in a blog post.
As part of Snap's evolution, it's become an increasing threat to Facebook and Instagram in terms of both attracting younger users and chasing ad dollars. A Nielsen study from September 2015 showed that the company was reaching 41% of all 18- to 34-year-olds.
That number is likely higher now. A recent eMarketer study said that Snapchat will have reached 58.6 million people in the US, or 31.6% of social media users, by the end of 2016.
Portia Crowe contributed additional reporting.
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