Snap Inc, the social media giant running Snapchat decided to open the headquarters of its international operations in London, the firm said on Tuesday. The company's new division is called Snap Group Limited and will soon be operational. Claire Valoti, General Manager at Snap Group, explained that Snap decided to settle in London as that's where a lot of its advertising clients and Snapchat users are. Snap's executive said that Snapchat currently boasts over 10 million of daily active users in the United Kingdom, adding that the company has already started hiring talent in the country. The firm's decision to set up shop in London is interpreted as a statement that Snap believes the UK will continue to serve as the leading tech hub in the world even after the country leaves the European Union following the Brexit referendum from June. Smaller tech companies have previously expressed worries about the effects of Brexit on the tech sector, but Snap followed in the footsteps of Google and Facebook and made more investments in the country.
Snap's approach to European operations also stands in stark contrast to that of many other US tech companies who often opt to record profits in countries with lower tax rates like Ireland. Unlike them, Snap will book all of its revenue in the United Kingdom. The company's UK financials will not only book sales made in the country, but also those made in every other territory where Snap doesn't have a physical presence. For example, once Snap's Spectacles become available for purchase in Europe, all of the profits made from them will be reported in the UK.
On the other side of the pond, Snap is still preparing for its initial public offering that's scheduled for March. The company's debut on the US stock market will likely mark the largest tech IPO since Facebook went public back in 2012 as Snap is expected to reach a valuation of at least $20 billion. Industry experts believe that the Venice-based social media giant will raise around $4 billion once it goes public in a couple of months. The company is expected to use that money to continue fueling its growth and diversifying its portfolio with products like the Spectacles.