NEW YORK — The company behind Snapchat, a teen-oriented social network famous for its quickly disappearing messages, has filed for what could be one of the largest tech IPOs in years.
Snap Inc. said Thursday that it's seeking up to $3 billion in an initial public offering, a figure that could shift based on investor demand.
The app has millions of users, and Snap has built a thriving ad business on it. But the company has also made a lot of money — nearly $900 million — disappear in the past two years.
Snap, crackle, pop
The fast-growing social network for the younger set boasts 158 million daily users. It lets people send photos, videos and messages that disappear a few seconds after viewing. It was created in 2012 by Evan Spiegel, who dropped out of Stanford University just three classes shy of graduation to focus on the app.
But rather than die a quick death as a "sexting app," Snapchat showed a knack for evolving based on user whims and demands, just as Facebook has over the years. This, as both companies have discovered, is key to outlasting social media fads. Snapchat is no longer just about disappearing messages.
Over the years, it has added a "Discover" section where a diverse group of publishers — including People, the Wall Street Journal, CNN, Vice and Food Network — post video-heavy stories aimed at millennials.
Another feature, "Stories," lets people create a narrative from messages, videos and photos from the past 24 hours. It's so popular that Facebook's Instagram now has a version of it, too.
And then there's goofy "Lenses," which lets people add animated overlays to photos and videos — animals, for example, or flower crowns and sparkly eyes. The company came under fire a couple of times for adding filters many saw as racist. One had slanted eyes and buck teeth commonly associated with negative Asian caricatures; another, which Snap called a "Bob Marley" filter, darkened people's skin. Snap later got rid of the offending filters.
Big money
The highly anticipated IPO is expected to be the one of the largest since Alibaba Group went public in 2014. But Snap is better known than the Chinese e-commerce company, and instead draws comparisons to the IPOs of Facebook and Twitter. Facebook raised $16 billion when it went public in 2012.
According to IPO documents filed on Thursday, Los Angeles-based Snap had revenue of $404.5 million in 2016, up from $58.7 million in 2015. Its net loss was $514.6 million last year, up from $372.9 million the year before.
Facebook, on the other hand, was profitable in 2011, the year before its IPO, with net income of $1 billion. Twitter has never turned a profit.
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This story has been corrected to show that Facebook had profit of $1 billion before its IPO.