Snap executives reportedly met with potential investors in the US, teaching them how to use its Snapchat ephemeral messaging app, The Wall Street Journal reported, in preparation for an initial public offering (IPO) that could come as early as March.

The company is hoping to raise as much as $4 billion, with a valuation between $20 billion and $25 billion, through the IPO.

The meetings coincided with the app maker revealing its most recent quarterly results to existing private investors. Based on Q3 revenue, it is set to exceed its 2016 projection of $350 million at the high end by more than 10 per cent, the report said.

Snap’s team presented data on the age range of its users, talking up its share of the “highly coveted” 18-to-34 demographic, it added. According to Nielsen, more than 150 million people, including 41 per cent of 18-to-34-year-olds in the US, use Snapchat every day.

Snap filed for an IPO confidentially,  which is allowed for companies with revenue of less than $1 billion.

Snap’s main source of revenue is selling ads on Snapchat and it has recently forayed into hardware, releasing sunglasses embedded with a camera that is integrated with the app.

According to the WSJ report, this will be another source of revenue for the firm but also means new challenges, such as managing inventory, adding that the company “continues to lose money as it focuses on revenue growth and finding ways to make money off its larger user base”.

In 2015, the company generated $60 million in revenue, but expects as much as $1 billion next year.

Group messaging
Separately, Snapchat launched group messaging, supporting conversations with up to 16 people.

The move is designed to improve its appeal in competition with other services which offer group chats, such as Facebook Messenger and WhatsApp.

TechCrunch described groups as a “killer feature” that will solidify “engagement with the many millions of teens and people in their 20s for whom it is already the go-to app”.

The company also added new tools, Scissors and Paintbrush, to enable image editing.

And users can now Shazam from within Snapchat, by pressing and holding on the Snapchat camera screen when music is playing nearby.

Music and artist discoveries can then be sent to friends as Snaps.