As part of Snap’s IPO filing, the terms of the company’s cloud infrastructure partnership with Google have been disclosed.
The agreement was completed just a few days before the company officially filed for an IPO, and stated that Snapchat would purchase at least $400 million in Google cloud services over the next five years.
The photo and video sharing company has been using Google’s cloud services since 2013, though TechCrunch reports that the size of this deal could elevate Snap to one of Google’s most important cloud customers.
All in all, the breakout social media platform could be paying Google up to $2 billion USD for its cloud services through to 2022. In the most recent quarter, cloud services totalled about $3.4 billion in sales for Google.
The deal is reportedly listed as a potential risk factor in the company’s IPO filing, as it represents a huge commitment from Snap should the service experience issues or be discontinued.
While rumours have been circulating about Snap’s public filing, the company officially filed for a $3 billion IPO this past week with the New York Stock exchange.