IPO could be the largest for a US tech company since Twitter in 2013.
Snapchat is gearing up for an initial public offering by hiring Morgan Stanley and Goldman Sachs.
The popular messaging service, which was created by Snap, has hired the banks to lead the offering for what is expected to lead to a valuation of the company at between $20bn and $25bn.
Morgan Stanley and Goldman Sachs will lead the offering with other banks such as Credit Suisse, Barclays, Jp Morgan, Deutsche Bank, and Allen & Co working as bookrunners, according to the FT.
If the IPO goes ahead then it would be the largest US tech IPO since Twitter launched at a valuation of $18bn in 2013.
Although it may be the largest US tech IPO for a few years, the largest IPO in the US in recent years was that of Alibaba in 2014, which valued the Chinese firm at $168bn.
Although a date has not yet been set it is expected that the IPO could go ahead in March 2017.
Snapchat, which recently renamed itself as Snap, has been looking to broaden its portfolio away from the application and has looked at a move into hardware.
The company recently launched a pair of sunglasses called Spectacles that feature an integrated video camera.
Interest in the company has been high this year with it raising $1.8bn in a series F private fundraising round. This round brought its total funds to around $2.6bn.
Following a bumper year for IPOs in 2015 the market has been a lot quieter this year due to market uncertainty.
However, recent months have seen Nutanix, and Coupa file for successful IPOs and software company Misys also announce its plans for an IPO. Coupa Software saw its share price rise more than 90% as it debuted on the Nasdaq, while Nutanix’s share price rose over 130% on its first day of trading.
The success of these IPOs suggest that the market concerns may not be holding back investors from seeking out tech shares.