Snap Inc, the owner of messaging app
Snapchat, has moved a step closer to listing its shares on the stock
market after settling on which banks will help with the flotation.
Sources close to the deal confirmed Morgan Stanley and Goldman Sachs would underwrite the initial public offering (IPO).
Several other banks will be involved in the complex process.
The IPO is expected to value the company at $25bn (£20.5bn).
The listing - which could happen by March next year - would be the largest social media float since Twitter went public in November 2013.
Snapchat
has seen its popularity surge with 150 million people using it daily to
send and receive messages, photos and videos. The app is designed so
messages delete once they are read or expire.
With 10 billion
videos being watched every day, the site has seen a 350% increase in use
over the last year, according to Snap Inc. In June, the first lady of
the US, Michelle Obama signed up to the app.
A
round of funding in May valued the company at $18bn, the apparent ease
with which money was raised showed investor interest was strong.
Data
from eMarketer suggested the company could bring in advertising revenue
of almost $1bn by the end of 2017, a big rise from the $367m it is
predicted to make from adverts this year.
Other large startups,
such as Uber and Airbnb are also hotly tipped to be considering
floating. When taxi-booking app Uber agreed to sell its unprofitable
business in China to rival Didi Chuxing in August, it was seen as the removal of an obstacle for a future IPO.
Allen
& Co, Barclays, Credit Suisse, Deutsche Bank and JPMorgan Chase
will also be involved in the Snap Inc flotation, a source with knowledge
of the IPO said.
Snapchat declined to comment on the "speculation" surrounding the company's financing plans.
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