Snap to spend $1bn to use Amazon's cloud services

Snapchat's parent company Snap has said it will spend $1bn (£799m) to use Amazon's cloud services over the next five years.

In an amendment to a filing on 8 February at the US Securities and Exchange Commission spotted by Reuters, Snap said the investment is towards infrastructure support for its business operations. In future, the company might even invest in building its own infrastructure to serve its customers better.

In February the company said it was spending $2bn for using Google Cloud over the next five years. It built its software and computer systems to use computing, storage capabilities, bandwidth and other services of Google.

The company said it relies on Google for most of its computing, storage and bandwidth. It noted in the filing: "Google provides a distributed computing infrastructure platform for business operations, or what is commonly referred to as a "cloud" computing service, and we currently run the vast majority of our computing on Google Cloud."

The filing also highlights details about user habits outside North America and Europe. Snap said slower and expensive network connectivity has put a limitation on the use of its app, adding: "Our products often require intensive processing and generate high bandwidth consumption by our users." Users in these countries seem to be interested in consuming content rather than creating it.

"Fewer Snaps and Chats sent means fewer notifications inviting friends back into the application and therefore lower and more sporadic daily use," the company said in the filing.

The company filed its IPO registration statement last week, seeking to raise $3bn. The IPO could value the firm between $20bn and 25bn.