According to recode, Snapchat has secured a line of credit by Morgan Stanley, most probably with other banks participating too. They do so by sharing their vision of staying cool , top of the line and a profitable venture with such financial institutions. This is the best they could do to save from selling out their precious equity.
Snapchat can now borrow against this line of credit and pay back later if it needs cash. This gives the company the freedom to go public whenever it thinks the time is best without having to raise another round of funding.We believe, Snapchat can also use this line of credit to make more acquisitions.
Previously on its buying list were:
2014 it acquired smart glasses developer Vergence Labs for $15 million to jumpstart its hardware division,
and QR code startup Scan.me for $50 million to power its QR Snapcodes.
Snapchat bought augmented reality filter startup Looksery for a rumored $150 million last year to create its animated selfie lenses.
This year Snapchat bought 3D selfie maker Seene, and personalized Bitmoji sticker startupBitstrips for a reported $100 million.
it’s in talks to acquire mobile search and social planning startup Vurb for over $110 million.
CEO Evan Spiegel seems to have the same business ideologies as Facebook. He believes in buying new adaptations to its products to stay ahead in competition at the same time keeping the audiences interested in the product. They care less even if the prices are on the higher side.
Reports say they are going to be making $350 million in 2016, and want to be a $500 million to $1 billion business in 2017. If Snapchat goes by this pace it could continue earning the big money and pay back all the cash borrowed.
The approach of having an additional credit line helps them buy new ventures and stay ahead. This approach is right or not, time will tell .