Snapchat gearing up for IPO to the value of $25bn

The parent company of trendy messaging app Snapchat is working on an initial public offering for early 2017 that would potentially value the business at round $25bn.

Snap Inc. was formed in a rejigging of the company's structure, and the report from the Wall Street Journal says that the paperwork is being prepared for its flotation, bucking a trend from rising start-ups to resist the urge to go public.

March 2017 is seen as the most likely date for the flotation, but that is by no means set in stone, according to the report.

Snapchat told investors that it expects to take in between $250m and $350m in advertising revenue in 2016, and will begin the search for bankers to manage the deal by the end of the year.

The app allows users to send photographs with messages, and a set a time limit after which they will be deleted from the receiver's device.

It has become hugely popular among teenagers and millenials, with many large companies and media organisations using it to advertise their events and products.

If Snap Inc. were to reach a $25bn valuation, it would be the largest IPO for a tech company since that of Alibaba in 2014, which made a huge $168bn.

The IPO market itself has been suffering of late, with many up-and-coming tech companies preferring to remain private.