Snapchat parent Snap Inc. priced its shares at $17 apiece on Wednesday, raising around $3.4 billion in its initial public offering. It’s the largest public offering for a U.S. tech company since Facebook in 2012.
With that IPO price, Snap will be valued at nearly $24 billion when its 200 million shares start trading on the New York Stock Exchange under the symbol “SNAP” on Thursday.
In February, Snap priced its shares at $14 to $16 apiece, but demand from investors reportedly pushed the price higher than expected. The pricing is above estimates for company, which initially aimed to raise $3 billion.
The company’s rapid growth in the last year has made what was once an app marketed primarily to teens appealing to investors. Snap’s revenue jumped from $58.7 million in 2015 to $404.5 million last year. That’s a seven-fold increase. It’s also redefined itself as a camera company and plans to focus more on hardware following the hype over its Spectacles camera glasses.
Snap’s massive expansion mean the company has also outgrown its Venice Beach, Calif., headquarters. GeekWire reported in January that Snap is expanding its Seattle office, adding more than 50,000 square feet to its space.
This growth has drawn attention, but it hasn’t come cheap for the company. Last year, Snap lost $514 million. Investors are also reportedly worried about how the company is rolling out its shares. According to Reuters, Snap has told investors it expects to prevent them from selling up to a quarter of its shares for one year.
Still, if all goes with Snap’s IPO, the company will have one of the largest U.S.-listed IPOs in recent years, only behind Alibaba, Facebook, and Jd.com. Chinese e-commerce giant Alibaba holds the record with its 2014 debut valuing the company at more than $167 billion. This success could drive more tech companies to go public, signaling an end to a drought in the market.
The number of tech IPOs has steadily decreased in recent years, with only 14 in 2016, down from 28 in 2015, according to a CB Insight’s Tech IPO Pipeline Report. While Snap is the only unicorn – a company valued at $1 billion or more – expected to go public this year, analysts expect to see more startups filing for IPOs in 2017.
“We understand that many technology companies in general — and some cloud-related companies — are confidentially on file with the SEC,” McIlwain said. “Many of those companies are planning to go public in the second or third quarter. If market conditions hold, we should see that happen post the Snap IPO.”
Correction: This post has been updated the amount Snap Inc. lost in 2016 to $514 million.