It aims to funnel the proceeds into AR, media content as well as acquisitions.

In a significant development, Snap Inc disclosed it will raise $1 billion in short-term debt. It plans to invest the proceeds in augmented reality features, media content or could also channel it for making acquisitions.

Following a rough 2018, Snap, the owner of Snapchat, has managed to revive its user growth and stock prices. It continues to face competition from larger platforms such as Facebook and China’s TikTok.

“We will continue to focus on developing our content, gaming, and augmented reality platforms to enhance the Snapchat experience for our community,” said Snap Chief Executive Evan Spiegel in a memo to employees.

Snap plans on offering $1 billion in convertible senior notes which will mature in 2026, at which point it will choose to pay investors in cash, stock or a combination of both.

“The current low-interest rate environment gives Snap a good opportunity to complete the offering”, said Spiegel while noting that investor demand for convertible notes is strong.

He went on to add, the company expects to raise funds later this week.