After months of speculation, the cat is finally out of the bag. Snap, the parent of Snapchat, filed the paperwork that was required for its IPO (initial public offering) document. The company is notorious when it comes to maintaining its secrecy in operations, but this paperwork revealed many important details.
Going through the massive document, you get an insight into Evan Spiegel’s (the company’s CEO) philosophy and his planning for the future besides getting hands on the product history and of course the financials of the company.
The highlight of the $3 billion IPO filing was the revelation that Snap Inc. has signed a major $2 billion contract to use Google Cloud Platform. The company revealed that it has signed this deal with Google according to which Snap will be paying $400 million a year for using Google services for the next five years i.e. until 2022.
Snap said in the filing, “We use Google to host the vast majority of our computing, storage, bandwidth, and other services. But Google won’t be the only cloud platform Snap uses. The company is currently negotiating an agreement with another cloud provider for redundant infrastructure support of our business operations. In the future, we may invest in building our own infrastructure to better serve our customers.”
The company under the Risk Factors section quoted that majority of its users are on iOS. It was candid to note that while feature-wise there is parity between Android and iOS, when it comes to experience and performance there is no doubt that Google devices lagged behind. Thus, they emphasised on the need for developing their own products that operate on the smartphones running on Android operating systems to provide better user experience and hence continue growth in user engagement.
It was told that Spiegel and co-founder Bobby Murphy have complete say and control of the company as both own 21.8 percent of the company’s stock each. Now that was not a revelation, but it was to note that if one of them dies or becomes incapacitated, the other “could individually control nearly all of the voting power of our outstanding capital stock.”
Besides these big revelations, there were many other interesting facts revealed in the document like they made it very clear that they had no intention of bringing in “send to all” button. As per Snap, it will encourage spam and ruin the reputation of Snapchat being personal and fun.