For years, Los Angeles’ tech industry has been waiting for its big day: image-sharing app Snapchat’s initial public offering. Now the region’s engineers and investors may finally be able to start circling dates on the calendar.
Speculation that the Venice start-up will go public in the first quarter of next year escalated Thursday when the Wall Street Journal reported the company is eyeing a price tag of at least $25 billion, suggesting the plans are coming into focus.
The valuation could produce the U.S. stock market’s biggest initial public offering since online shopping giant Alibaba debuted at a $168-billion valuation in 2014.
Snapchat, now formally known as Snap Inc., has been beefing up its finance team to prepare for the IPO and handle an influx of cash. Snap could bring in close to $500 million in revenue this year, almost 10 times as much as last year. It expects to exceed $1 billion in 2017, according to people familiar with the matter. Whether Snap is profitable is unclear.
As one of the few private companies in the world valued at more than $10 billion, Snap already has raised the Los Angeles tech industry’s profile. An IPO would not only further establish both the company and the community on the global stage but also lead to a bevy of newly wealthy employees who may begin to invest in other local firms.
Tom Unterman, a founding partner at Santa Monica venture capital firm Rustic Canyon Partners since 1999, said a Snap IPO would dwarf the region’s previous Internet offerings, such as those of EToys and TrueCar.
“The IPO is a rite of passage. When you do that, the markets have recognized this is real and there’s real value,” Unterman said. “It’s impactful because it tells the investment world that there’s big things happening in the tech scene in…