Snap Inc., the parent company of Snapchat, is reportedly going public in early 2017 with an initial public offering (IPO) worth $25 billion. What has prompted the company to go public? Is a massive push back against Facebook looming in the sidelines?
As reports of Snapchat — a mobile messaging app that allows one to share videos and pictures — parent company readying for an IPO swirl in the market, rival Facebook must be uneasy as the move is a clear indication that Snap Inc. is looking to spread its wings far and wide.
Snap Inc.'s CEO Evan Spiegel is already making steady inroads towards growing the company, as it explores new areas with its first-ever hardware products — Spectacles — which can record 10-second long videos that can be later posted on Snapchat.
Moreover, the company also debuted its new advertising platform, which will mechanize the sales of its advertising inventory via third parties. Snapchat boasts over 150 million active users daily, and this move is viewed by market experts as the catalyst which will further fuel its ad revenue growth.
That Snap Inc. is looking to tap the consumer space is no secret and with its alleged IPO debut in March 2017, the company is poised to tap into the market and tread over Facebook in the process.
Sources have let slip that Snap could potentially be utilizing some of the money it raises from the IPO towards making acquisition in two upcoming areas - VR and AR.
Facebook already owns Oculus VR and even has a Social VR team in place to aid in the development of VR experiences across multiple platforms. Moreover, it is also working on its own virtual reality apps as disclosed by Chris Cox, Chief Product Officer at Facebook, in February this year. Facebook also strengthened its VR aspirations with the acquisition of Two Big Ears, the VR audio startup in May this year.
With Snap eyeing a foray into the VR and AR space, Facebook could well be in for a tough time. That Facebook has been attempting to buy Snapchat and copy it blatantly is no secret. The introduction of Facebook-owned Instagram's Stories feature in August or the Messenger Day feature is one of the many examples.
Snapchat is one of the most popular apps with the millennials and its popularity, when compared to Facebook, is on a steady rise. With Snap going public, investors and advertisers alike will show more confidence in the new player vis-à-vis Facebook, especially given the former's 150 million daily active user credentials. This spells trouble for Facebook which could find itself in a tough spot.
If Snap Inc. puts the funding to good use — expanding its physical product line beyond spectacles — Facebook may just find itself running short on ideas!
Photo: MKHmarketing | Flickr
