Snapchat’s Parent Files for a Stock Offering

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The clock has started for one of the most eagerly awaited market debuts of 2017: that of Snapchat, the po[CENSORED]r messaging service.

The social network’s parent, Snap Inc., has filed confidentially to go public, with an eye toward being valued at more than $30 billion, people briefed on the matter said Tuesday. That would make Snap the third-most-valuable technology company at the time of its market debut, after Alibaba and Facebook.

The company is aiming to begin having its shares traded as soon as March, though the final timing for an offering has not been determined.

The confidential filing, made with the Securities and Exchange Commission before the presidential election last week, comes amid a relative drought in the market for initial public offerings. There have been 96 offerings of companies with a market value of more than $50 million in the United States so far this year, down 41 percent from 2015, according to data from Renaissance Capital.

A successful debut of Snap could help revive that market, encouraging other technology companies to go public. It would be the first top-tier “unicorn” — Silicon Valley lingo for private companies valued at $1 billion or more — to go public next year. Unlike Uber, Airbnb or the lender SoFi, however, Snap has a main business that is not subject to a web of government regulations that make a public listing complicated.

A Snap share sale is also expected to eschew the complexities of previous technology initial public offerings like Google’s in 2004. Still, like Google, Facebook and other tech companies, Snap’s recently amended corporate charter shows that a different class of stock would enable its top executives, including its co-founder Evan Spiegel, to maintain control even after the service is publicly traded.

Yet Snap will encounter intense scrutiny from potential investors, as rivals try to encroach on its turf by copying some of the photo messaging service’s signature features. In August, Facebook’s Instagram rolled out its version of the Snapchat Stories photo and video service.

A spokesman for Snap declined to comment on the filing, which was reported earlier by Reuters.

Founded in a Stanford University dorm room in 2011, Snapchat has become a darling of the tech world, as it has grown from a simple disappearing-messages service into a digital video phenomenon. Its lofty goal is to essentially become the online generation’s equivalent to television.

It has built up its po[CENSORED]r Stories service, in which users upload photos or videos and share them with followers. And it gained new levels of po[CENSORED]rity after rolling out features like lenses, which lets users transform their likenesses into cartoon dogs, silly faces — or Taco Bell tacos, paid for by sponsors.

Such has been the po[CENSORED]rity of Snapchat that media organizations have rushed to establish beachheads on the service. Even the White House has set up a Snapchat account, and President Obama has given an interview on the company’s in-house political show.

Analysts have estimated that Snap, which began its advertising business less than two years ago, could reach $1 billion in sales next year, up from more than $350 million this year.

Snap’s financial information will be known when its offering filing is publicly disclosed — if the company decides to go ahead with a sale of its shares.

The confidentiality of Snap’s filing was made possible by the Jumpstart Our Business Start-ups. or JOBS, Act of 2012, which permits companies with less than $1 billion in revenue to conduct much of their preparation for an I.P.O. away from the glare of public scrutiny. Twitter, GoPro, Box and even the English soccer club Manchester United have filed confidentially for stock listings in the United States in this way.

Under the law, companies must publicly disclose their offering documents some 15 days before they start pitching the proposed share offering to prospective investors in what is known as a “road show.” The investment banks Morgan Stanley and Goldman Sachs have been hired to lead the offering, people briefed on the matter have previously said.

Unlike some private companies, Snap has had no trouble raising money on the private markets, so investors were not given preferential treatment regarding how many shares they will get in the event of a public offering, according to corporate documents filed in Delaware.

This sets Snap apart from offerings from Square and Box. Both of those companies had to give some of their private investors special deals that diluted other early shareholders. When Square went public last November, some investors received an additional 10.3 million shares, which came at the expense of other investors.

Similarly, when Box went public in 2014, some of the company’s earlier private investors were entitled to extra shares.

“Snapchat will certainly be an indicator of whether there is a big pile of investor cash ready to go into the market,” said Doug Bontemps, Silicon Valley Bank’s managing director of corporate finance. “But Snapchat is unique. It’s growing quickly, is doing some interesting things with glasses and has gotten a lot of attention. There aren’t a lot of that ilk.”

Correction: November 15, 2016 
An earlier version of this article misstated the number of days in which companies must publicly disclose their offering documents before pitching the proposed share offering to prospective investors. It is 15 days, not 21.