Snapchat has proactively been snapping up tech companies this year en route to an expected IPO. Now, its formidable buying power could be set to receive a significant boost thanks to the company securing a new line of credit with a number of banks, including Morgan Stanley.
We reached out to Snapchat, but it declined to confirm the financial details behind the deal. Regardless of the exact numbers, raising debt financing indicates that it could be mulling more takeovers. Alternatively, it may just want to free itself of the hassle of seeking investment every time it wants to expand its offering.
Not that funding is a hard sell for the company — this year alone, Snapchat has accumulated over $2 billion on a rolling basis from a number of prestigious backers, including Fidelity, Alibaba, Tencent, and the Saudi investment group Kingdom Holding Company. Its most recent round of funding valued the app at just under $18 billion.
Snapchat has now taken what’s referred to in financial terms as a credit facility, meaning it can borrow against the line of credit at any time, Recode reports. Comparatively speaking, Facebook made the same move ahead of its IPO in 2012, although Snapchat refused to confirm when it plans to go public.
Sticking with the Facebook comparison, Snapchat (like its larger rival) is acquiring apps at a frantic pace. This year alone it has nabbed emoji creation app Bitmoji — later integrating it into its flagship product — and AR selfie app Seene. It is also in the process of finalizing a $110 million takeover of search and discovery app Vurb. Additionally, it simply can’t escape the speculation surrounding its first venture into hardware creation, with rumors claiming that it is working on a pair of smart glasses. Just this week, we reported that Snapchat had joined the Bluetooth Special Interest Group, which tends to be the first step in the manufacture of a Bluetooth-enabled device. A deep piggy bank would definitely come in handy if it were planning to go down that route.