The IPO could value Snapchat at about $US25 billion to $US35 billion, the people said, asking not to be identified as the details aren't public. No final decision has been made and the size of the IPO may change, they said. The valuation could reach as much as $US40 billion, one of the people said.

Valuations can vary in the lead up to an IPO as companies may try to temper expectations among investors, while others on the deal are more likely to promote higher numbers.

Five-year old Snapchat, which is led by its co-founder, 26-year old billionaire Evan Spiegel, recently changed its corporate name to Snap Inc. It's preparing filings for a listing and aims to sell shares in the first quarter of next year, people familiar with the plans said earlier this month.

Because the company's revenue is less than $US1 billion, it plans to file IPO documents confidentially with the US Securities and Exchange Commission, one of the people said.

A representative for Snapchat declined to comment.

A Snapchat IPO early next year could set the stage for a resurgence of technology listings after a slow 2016. The last buzzy consumer-tech listing in the US was in November last year, when Match Group, the online-dating powerhouse that owns Match.com, OKCupid and Tinder, went public at a valuation of $US2.9 billion.

Snapchat chose Morgan Stanley and Goldman Sachs Group to lead its offering, people familiar with the matter said earlier this month. JPMorgan, Deutsche Bank, Allen & Co., Barclays and Credit Suisse will also be involved as joint book runners, the people said.

The Los Angeles-based company makes an application for sharing selfies and videos, watching news videos and chatting with friends. After its last funding round, Snap's private market value reached $US18 billion, meaning that its IPO would be the biggest of a social media company since Twitter sold shares in November 2013.

Bloomberg