Snap just priced its IPO at $17 a share

It's official: Snapchat parent company Snap Inc. just raised $3.4 billion in the tech industry's largest initial public offering in over two years.

Snap sold 200 million shares at $17 apiece, according to multiple reports.

It had aimed to raise $3.2 billion by offering 200 million shares at between $14 and $16 - or at a valuation of up to $22 billion.

Demand for the IPO was heavy, and by Tuesday potential investors were being told the there was enough demand to drive the share price to $17 or $18, valuing the company as high as $25 billion.

That's the valuation the company expected when it first considered an IPO, according to people with knowledge of its plans at the time.

Shares are scheduled to begin trading Thursday, under the ticker SNAP.

Investors had to weigh the potential for the disappearing messaging app to serve as an advertising platform that can live up to its lofty valuation. Goldman Sachs, one of the banks on the deal, is predicting that Snap's revenue will rise to $2 billion by 2018 - which would mark a five-fold increase over 2016 sales.

The rate of Snap's user-base growth was a focus of the company's roadshow meeting with potential shareholders, according to those in attendance, with many asking about the causes of the slowdown and how much of an issue it might be.

"The deceleration in user growth is a clear indicator that Snap is losing its snap," said Lee Bressler, a portfolio manager at Carbon Investment Partners, a small hedge fund, ahead of the IPO pricing. "Instagram's Stories feature is a direct competitor and will continue to take market share. This could be the next Twitter, or worse, Myspace."

Twitter, which went public in 2013, is struggling to grow its user base and investors who held the stock for the last three years have been punished for it: At about $16 a share currently, the stock is well below its IPO price of $26.

Still, for now, investors have set those concerns aside to focus on the potential.

In the company's roadshow materials, Snap said its biggest revenue opportunity is the growing budget for worldwide mobile advertising, which could reach $196 billion by 2020 from $66 billion currently.

Snap's business is to "create the best camera platform so we can drive engagement and monetize that engagement through advertising," Chief Strategy Officer Imran Khan said in a video posted as the IPO kicked off. Snapchat runs television-style ads on its Stories feature, which appear for users in between their friends' stories. It also partners with companies that sponsor custom filters, which users can apply to the images and videos they take.