Secret filing gets ball rolling on Snapchat IPO, reports say

Snap Inc., the technology company behind Snapchat and Spectacles, reportedly has filed confidential paperwork with regulators that brings it a big step closer to going public early next year.

The Venice start-up’s expected initial public offering is drawing widespread attention in tech and financial circles because it could be one of the largest fundraisings in recent years. Snapchat could generate around $4 billion at a valuation that could reach as high as $40 billion, sources have said, declining to comment by name on private discussions.

The company submitted the filing to the Securities and Exchange Commission sometime in recent days, according to reports Tuesday by Reuters and other publications. Now Snap, its bankers and regulators will work to ensure that the company is prepared to share proper financial information and other corporate details with potential investors. The discussions could reshape the filing before it becomes publicly available.

Revenue from advertising on the popular video-sharing app Snapchat and sales of hardware, including Snap’s recently launched Spectacles video camera sunglasses, could total $1 billion next year. It’s unclear whether the company projects a profit in 2017.

Snap continues to quickly grow its workforce and research efforts. Proceeds from the IPO would probably accelerate such spending.

Snap did notch a possible setback Tuesday when Google announced that it had poached head of research Jia Li, an expert in developing software that recognizes objects and scenes in digital images. Similar technology is already used in facial animation tools in Snapchat.

Snap was able to register with the SEC without issuing the filing publicly because its revenue this year is below $1 billion. Under a law enacted in 2012, companies under that sales threshold are subject to less stringent regulations, including lower requirements for having audited financial statements. They also gain the ability to test the water with investors before having to share sensitive financial details with the world.

Snap declined to comment on financing matters.

paresh.dave@latimes.com 

Twitter: @peard33

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