Snapchat grilled by skeptical investors ahead of IPO

By John Glenday | Reporter

February 23, 2017 | 2 min read

Snapchat’s management team have been grilled by investors ahead of the businesses much anticipated IPO, as they sought to assuage concerns over bitter competition from Facebook, user growth and poor reach in developing markets.

Parent firm Snap has set itself the target of raising as much as $3.2bn from what would be the biggest tech IPO since Facebook, forcing executives to mount a global charm offensive to be sure of reaching the higher echelons of its valuation.

As part of their sales pitch Snap officials have produced a canary yellow pitchbook for hedge funds while management from CEO Evan Spiegel down serenade suits over sandwiches and coffee.

Snap is hoping to achieve a valuation of between $19.5bn and $22bn when it floats, emulating the soaring stock of Facebook but is having to work hard to fend off concerns that it is more likely to be bracketed with the becalmed Twitter after posting a sudden slowdown in user growth.

At stake are perennial issues of how Snap intends to monetise its user base, accentuated by a sharply slowing growth rate which fell to just 48 per cent versus a year earlier in the fourth quarter.

The latest marketing news and insights straight to your inbox.

Get the best of The Drum by choosing from a series of great email briefings, whether that’s daily news, weekly recaps or deep dives into media or creativity.

Sign up

Spiegel and co-founder Bobby Murphy stand to make billions from the IPO.

Trending

Industry insights

View all
Add your own content +