Snap, the owner of messaging app Snapchat, has publicly filed plans to sell its shares on the US stock market.
The California-based tech firm, which allows users to send images that vanish within seconds, is set to be the biggest company to list shares in the US in recent years.
Based on previous investments, Snap would be worth between $20bn and $25bn.
The company revealed in the documents that it made sales of $404m last year, but a loss of $515m.
Snapchat: Is it really worth $25bn?
The company began in 2011 when co-founder, 26-year-old Evan Spiegel, was still at university.
It now has nearly 160 million daily users and last year revenues grew by nearly 600%, the listing documents revealed.
However, the firm also said it was yet to make a profit.
Heavy costs, including from marketing and research, dragged Snap to a net loss of $515m in 2016, after a loss of $373m the year before.
Snap said in the filing that it expected “to incur operating losses in the future, and may never achieve or maintain profitability”.
Despite the losses – and that warning – some investors see Snapchat as the next potential Facebook, said CCS Insights analyst Martin Garner.
“If it can repeat the Facebook story to some extent, it’s going to be hugely profitable,” he said.
Most of Snapchat’s revenue comes from advertising, and it is seen as an appealing way for companies to reach young people, with over half of its users aged between 13 and 24.
Analysts predicted its US stock market listing would be the biggest since the launch of Chinese e-commerce giant Alibaba in 2014, and before that Facebook’s $81bn valuation in 2012.
It would also mean a big payout for Mr Spiegel, who is set to remain a major shareholder.
Just over three years ago, he turned down an offer from Facebook’s co-founder Mark Zuckerberg to buy Snapchat for $3bn.
The company is now seeking to raise $3bn from the share sale, according to reports, valuing the company at much more.
Snap names Facebook as one of several companies it is competing with for users’ attention, along with Twitter and Google-owned YouTube.
However, it is also seen as a fast-growing rival to those major Silicon Valley players.
Under pressure from Snapchat, Facebook has launched new filters and a slideshow feature on its photo-sharing app Instagram.
“A lot of people think Facebook is losing younger users to Snapchat. There’s a lot of evidence Facebook is copying Snapchat’s features,” Mr Garner said.
But with Facebook drawing in 1.2 billion daily users, Snapchat needs to prove it can have general appeal, he added.
Keen to show it can make revenue from sources other than advertising, Snapchat rebranded itself as Snap last year, and debuted its video-camera sunglasses called Spectacles.
The kit can connect to smartphones and send video and photos to the app.
Last month, the firm said it had established its non-US office in London.
Snap said it would pay taxes on UK and some international sales through the hub.
