- Facility to provide financial flexbility ahead of eventual IPO
- Fast-growing startup has yet to hold IPO ‘bake-off’ with banks
Snapchat Inc. has taken out a line of credit, with Morgan Stanley as the lead banker on the deal, according to people familiar with the matter.
The credit facility will allow the company to fund its growth without diluting the ownership of its equity holders. The company has eventual plans for an initial public offering, though it hasn’t had serious talks with banks about it yet, the people said. One of the people noted that Snapchat has yet to have a "bake-off," where banks pitch for IPO roles.
Snapchat was valued at about $18 billion after its last round of funding in May, people familiar with the matter said at the time. In that round, the company raised about $1.8 billion, according to a regulatory filing.
Snapchat, the fast-growing company for posting short, annotated videos and photos, has evolved its advertising business to the point that it could reach $350 million in revenue this year, up from $59 million last year, people familiar with the matter have said.
The technology blog Recode earlier wrote about Los Angeles-based Snapchat’s credit facility.