Snap Inc. Committed to Spend $1 Billion on Web Services With Amazon
Snap Founder and CEO Evan Spiegel
Snap Inc. has a deal to pay Amazon.com Inc. at least $1 billion for internet services over the next five years, adding to a $2 billion agreement it already has with Google. One of the big takeaways from the company’s original S-1. Snap IPO paperwork made public Thursday morning.
Snap, a photo and video-sharing app popular with teens and millennials, filed for an initial public offering last week. The company is seeking a valuation of as much as $25 billion.
The deal was signed last year, but details were released Thursday in an update to Snap ’s initial public offering documents and then amended on Wednesday. Snap says it may “invest in building our own infrastructure to better serve our customers.”
Snap will pay Amazon $50 million in 2017 and and increase its spending each year for the next five years until it reaches at least $350 million in 2021.
Splitting the work between Google and Amazon decreases the company’s reliance on a single company
Amazon cloud business brought in $12 billion last year.
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