NEW YORK (TheStreet) -- Messaging app Snapchat's parent company Snap confidentially filed for an IPO with the SEC and could go public as early as March with a valuation of $20 billion to $25 billion, Bloomberg News reports. Companies making less than $1 billion can file for an IPO secretly to test investor appetite.
"It's time" for Snap to have an IPO, Bloomberg News' IPO reporter Alex Barinka said on "Bloomberg Markets: America" on Wednesday afternoon.
"There comes a time in these companies' life cycles where you have to go out," she said. "That amount of time typically in private tech has lengthened but Snap is actually an earlier mover getting out the door. It seems like they're ready to face the markets."
For one, Snap has been raising lots of capital, Barinka noted. "It seems like they've tapped a lot of different pools of capital, right? They've raised from seed, VC, growth equity, credit line. If they need the money, they need to go."
"Are they at risk of a down round now if they don't go?" BloombergTV's Vonnie Quinn asked.
"They did raise earlier this year and it went fine so that is always a question," Barinka answered.
Second, the investors that would be funding Snap further as a private company would look "very similar" to the investors that would take a stake in it publicly anyway, such as bigger firms, mutual funds and hedge funds, she noted.