Snap, the company behind Snapchat, is seeking a $25 billion valuation on the New York Stock Exchange. So what do the financials look like for a $25 billion startup?
The company publicly filed its IPO paperwork on Thursday, giving potential investors their first real glimpse at the super-secretive company.
The key figures:
- Snap brought in $404.5 million in revenue in 2016, up from just $58 million in 2015. (Recode previously reported many of these numbers, but they’ve never been confirmed by the company until now.)
- Snap is not yet profitable. The company lost $514.6 million in 2016.
- Snapchat, the company’s core product, has 158 million daily active users. For comparison, Facebook-owned Instagram has 400 million DAUs.
- Snap has 1,859 employees.
Based on the numbers, Snap looks a lot more like pre-IPO Twitter than it does pre-IPO Facebook, which may not be the comparison potential investors are looking for.
Twitter brought in $317 million in revenue the year before its IPO and had "more than" 100 million daily active users.
Facebook, on the other hand, was already a $3.7 billion business in the year before its 2012 IPO and had 483 million daily active users.
Just like Facebook and Twitter, Snap’s business is driven almost exclusively by advertising. The company just expanded its advertising API earlier this week, which means marketers can buy Snapchat ads through automated bidding algorithms.
Snap is also starting to offer more elaborate types of ad targeting to lure in potential marketers — it’s the kind of stuff CEO Evan Spiegel once described as "creepy," but the kind of targeting that Facebook, Google and Twitter all offer. So Snap is starting to offer it, too.
Convincing advertisers to spend on Snapchat will be just half the battle. Snapchat will also need to deliver consistent user growth in order to appease investors. As a private company, Snap rarely shared user figures.
Now it will report them quarterly, and we’ve seen from Twitter what can happen to an advertising-dependent company when user growth plateaus. Plus, Facebook and Instagram seem to be doing everything in their power to keep Snapchat from growing.
Snap plans to trade under the ticker symbol "SNAP."
This article originally appeared on Recode.net.