Snapchat owner dials down IPO valuation to maximum of $22.2bn but may still break US tech record

Snapchat dials down IPO valuation to $22.2bn ahead of investor roadshow

Snapchat has set its IPO valuation as high as $22.2bn, dialing down its previous ambitions of hitting $25bn but still putting the company on track to be one of the biggest tech floatations the US has seen.

The industry has been keeping a close eye on Snap Inc since the upstart published details of its forthcoming IPO back in January in the form of an S1-filing which promised growth but not profit in the short-term.

According to the Financial Times, Snap is due to host an investor roadshow next week with presentations in London, Boston, New York and San Francisco.

The firm has set its value range between $19.5bn and $22bn, with share prices currently expected to be available at $14-to-$16 a pop on the New York Stock Exchange.

Although this pricing is lower than initial estimates, the IPO still has the capacity to become the most significant tech floatation since Facebook went public in 2012 and raised just over $16bn.

Snap conceded in its IPO filing that it attracted a smaller audience than Facebook or Google, but pointed to Snapchat's popularity among younger users as a differentiator.

According to its own figures, Snapchat's 150 million global daily active users are concentrated in the 18-to-24 year-old demographic. The company's revenue growth leapt by 600% from $59m in 2015 to reach $404.5m in 2016 thanks to a mammoth overhaul of its advertising toolkit; something that is also likely to woo investors.

Snap also outlined the challenges facing the business in its IPO filing, notably pointing out that the UK's exit from the EU could have a negative effect on its numbers given that a "significant portion" of its business comes from the region.

Final pricing of Snap's IPO is expected after the market close on March 1.

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