Snap Inc files for $3b initial public offering

Sarah Buck, 23, (L) recruiter for messaging app Snapchat, talks to job seekers at a booth at TechFair LA, a technology job fair, in Los Angeles, California, US, January 26, 2017. [Photo/Agencies]

Snap Inc, the maker of the disappearing photo app Snapchat, filed for an initial public offering, the first social-media company to do so since Twitter Inc more than three years ago.

The company filed with an initial size of $3 billion, a placeholder amount used to calculate fees that may change. Snap plans to raise as much as $4 billion in the IPO, people familiar with the matter have said, for a market value of as much as $25 billion.

The company's net loss widened to $515 million in 2016, on revenue of $404 million, according to the prospectus filed on Thursday.

Snapchat has more than 158 million daily active users, the prospectus shows. Quarterly average revenue per user on a global basis climbed to $1.05 in the fourth quarter of 2016, compared with 31 cents in the fourth quarter of 2015.

Snap plans to use proceeds from the offering for general corporate purposes, which may include acquisitions, the filing shows.

The company said it relies on Alphabet Inc's Google for most of its computing, storage and bandwidth, and any disruptions to Google's cloud functioning could "seriously" hurt its business. Snap said it plans to spend $2 billion with Alphabet over the next five years to use Google's cloud-computing services.

It also noted that because Snapchat is used primarily on mobile devices, it relies on Google's Android operating system and Apple Inc's operating system, over which it has no control. Snap also competes with those companies.