The Chinese e-commerce giant has invested $200 million in Snapchat, which marks a significant increase from previous investments, says The Wall Street Journal.
The deal values Snapchat at $15 billion, in the latest sign of escalating valuations for Silicon Valley start-ups.
Snapchat raised funds from at least two investors, Yahoo Inc. and venture-capital firm Kleiner Perkins Caufield & Byers, in a round of funding that valued the messaging startup at $10 billion
last year.
Other investors include Benchmark, General Catalyst Partners, Institutional Venture Partners, Lightspeed Venture Partners, Coatue Management LLC and DST Global.
Alibaba had held talks with Snapchat in July, the WSJ reported. One of the people familiar with the latest deal said Alibaba’s interest had cooled then been rekindled recently.
Snapchat's significant success among investors was in part a result of the ephemeral nature of its messages. Its text and photo messages disappear after a certain amount of time, limiting the possibility that content will come back to haunt the user, and the company has become one of the world’s most-valuable start-ups by market valuation. People who have been briefed on its internal metrics say it has more than 100 million users.
Chief Executive Evan Spiegel has cited the success of Asian tech
giants, like Samsung Electronics Co., in building large businesses around mobile messaging apps as an
inspiration for Snapchat. Thus, Mr Spiegel said Snapchat aims to turn his free app into a moneymaker. The company began generating its first revenue in recent months as it sold ads to marketers including Samsung Electronics Co.
and Universal Pictures.
The investment marks Alibaba's latest foray into both Silicon Valley start-ups and social media. Its U.S. investments have included video call app maker TangoMe Inc., mobile search provider Quixey Inc. and ride-hailing service Lyft Inc. In China, it increased its stake last year in China’s Weibo Corp. social-media company and has invested in its own Laiwang chat app.
The agreement again puts Alibaba in the same camp as its chief rival, Tencent Holdings Ltd.,
which previously invested in Snapchat.
The WSJ reports that last month Tencent-backed Didi Dache, a Chinese ride-hailing app, agreed to combine with rival Kuaidi Dache, which is backed by Alibaba.
