Snapchat is gearing up for its $25bn (£20bn) float next month by signing major data storage deals with Amazon and Google, worth up to $3bn (£2.4bn) over the next five years.
The figures are even more eye-watering considering the business – which has 161 million users – has yet to make a penny of profit. In fact, last year the Californian company recorded losses of $514m (£411m) on a turnover of $404m (£323m).
The data storage deals were revealed in the firm’s public offering filings late last week, which show that it has signed a $2bn (£1.6bn) cloud services deal with Google alongside a $1bn (£800m) contract with Amazon.
Why it has not built its own data centres is still somewhat of a mystery; the two deals are equivalent to six times the turnover it has generated since being launched five years ago.
The contracts will see both Google and Amazon transmit and store the billions of pictures and hours of video swaped by Snapchat users.
Someone somewhere must be confident that it can turn a profit soon. Its $25bn listing will be the biggest since Alibaba’s $168bn (£134bn) debut in 2014 and will make billionaires of its two founders, Evan Spiegel and Boby Murphy, both still in the 20s.
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