Snap, the company behind the social networking app snapchat is in the news once again. The company is now planning to raise $3 billion on IPO (initial public offering) and Google Cloud services as it expands. The Southern California-based giant unveiled its dependence on Google Cloud service in the Snap IPO prospectus on Thursday.
The filing also revealed company’s intention of paying $400 million each year for Google over the next several years. Snap admitted the truth of relying on Google Cloud services for the majority of storage, computing, bandwidth, and other services. Also, the company claimed that disruption in Google Cloud operation would affect their companies operation negatively.
“We have committed to spend $2 billion with Google Cloud over the next five years and have built our software and computer systems to use computing, storage capabilities, bandwidth, and other services provided by Google Cloud, some of which do not have an alternative in the market,” states Snap IPO prospectus.
Snapchat Renamed to Snap Inc and Launched Camera Equipped Spectacles
Snap tie with Google Cloud Platform includes the payment of $2 billion leads to a deep association between two companies. Besides that, the company has also indicated its view towards alternatives to Google Cloud. Snap is also making an agreement with another cloud provider for superfluous infrastructure support to their business operations. Soon, it may build its own infrastructure to serve our customers better.
Snap is better known as Camera Company and recently unveiled Spectacles which can record up to 10-seconds. The company still believes in reinventing the camera will be a best opportunity to represent the people way to communicate. It also faced substantial challenges, especially its mountain of red ink.
SEC documents of the Snap show that the company lost $514.6 million during 2016. The company had 158 million average daily active users during the fourth quarter of 2016.
