Snapchat spending $2 billion over 5 years for Google Cloud

By now you might have seen the news that Snap Inc, the parent company of Snapchat, has filed the documents for an initial public offering (IPO), the beginning of the process that will see the firm sell its shares on the USA stock market.

With Spiegel owning 22% of Snap’s class A common stock, he will become an instant billionaire in the IPO: If Snap achieves that golden $25 billion valuation, Spiegel’s shares will be worth almost $5.5 billion. According to data pulled by CNBC, Snap Inc. had a net revenue of $404.48 million in 2016, a big uptick from the $58.66 million made in 2015.

CEO EVAN SPIEGEL started the company while an undergraduate at STANFORD UNIVERSITY.

Snap – which initially let users send disappearing messages and has since added other services – is an fantastic success story that’s likely to revive the market for venture-backed technology IPOs. Investors are concerned that user growth could be slowing as the company had a 7% increase from the second to third quarter. THE VERGE explain how Snap, Inc is facing an exciting yet challenging time.

The company confidentially filed paperwork for an IPO before the presidential election.

“Our ecosystem of users, advertisers, and partners depends on the engagement of our user base”.

The terms of Snapchat’s cloud spending with Google was detailed in the company’s initial public offering filing. The share sale could take place as early as the first week of March, the Wall Street Journal reported.

Snapchat, the company’s communication app focused on sharing photos and videos, has been a real market success. Snap plans to use proceeds from the offering for general corporate purposes, which may include acquisitions, the filing shows.

Snapchat cited traditional companies in the TV space among its competitors, as it filed papers for a planned US$3 billion IPO.

It will trade on the New York Stock exchange under the symbol “SNAP“. It had 158 million daily active users in the fourth quarter of 2016 and the average revenue per user was $1.05 for that quarter, compared to $0.31 for the same period in 2015. The filing revealed that he is set to receive shares equal to 3% of the company’s outstanding stock, which could translate to an added $600 million or more depending on the company’s eventual share price.

The company has also been careful to not draw comparisons with Facebook in its internal and external messaging.