Snap seeks IPO valuation up to $22.2 bn

The company generates the majority of its revenue from advertising

Snap Inc, owner of the popular messaging app Snapchat, has set a valuation of between $19.50 billion and $22.2 billion in its initial public offering, significantly below expectations.

The company, which filed for an IPO earlier this month, was widely expected to be valued at between $20 billion and $25 billion, giving it the richest valuation in a US technology IPO since Facebook Inc.

“I think that the lower proposed valuation reflects feedback from institutional investors that the higher valuation is hard to justify,” Jay Ritter, IPO expert and professor at the University of Florida, told Reuters. “The concerns are about Snap,