Sources: Snap Inc. has chosen Morgan Stanley and Goldman Sachs as the lead bankers for its IPO, which is expected as soon as March 2017
Company's public market listing could happen as soon as March — JPMorgan, Deutsche Bank, Allen & Co. also involved in offering
Context & Ripple Effects
Snap's banker selection closes out a process that has been running all fall: sources had Snapchat shopping the mandate among investment banks back in September, and the company moved to a confidential filing by mid-November. The size of the prize explains the five-bank lineup — Snap is reportedly seeking as much as $4B at a $25B-$35B valuation, one of the largest tech offerings in years.
First-order effects
- Morgan Stanley and Goldman Sachs take the top-left billing — and the largest share of underwriting fees — on a raise of up to $4B, while JPMorgan, Deutsche Bank and Allen & Co. settle for supporting roles.
Second-order effects
- The league-table stakes are real: landing lead roles on a marquee consumer-tech listing strengthens both banks' pitches for the next crop of late-stage startups weighing a 2017 debut.
Third-order effects
- A five-bank syndicate on a single offering points to IPOs being staffed like capital-intensive infrastructure deals — fees spread thin across more banks as issuers trade exclusivity for distribution and research coverage.
The trend: After a multi-year drought in large tech listings, Snap's March-targeted IPO is the test case for whether 2017 reopens the public market for late-stage consumer internet companies.