Snapchat\'s latest valuation is a massive increase for a company that Facebook offered to buy in late 2013 for $3 billion.
China-headquartered Alibaba Group Holding Ltd is reportedly investing $200 million in Los Angeles-based SnapChat, which allows its users to send messages that disappear in seconds, according to various media reports.
The investment values the company at around $15 billion, according to Bloomberg, citing people familiar with the situation as saying. Snapchat's latest valuation is a massive increase for a company that Facebook offered to buy in late 2013 for $3 billion.
Key to the deal was Imran Khan, who was hired by Snapchat as Chief Strategy Officer last December, the source said. Khan was formerly head of Asia investment banking at Credit Suisse and was instrumental to executing Alibaba’s massive IPO in the US. He has been credited for raising Credit Suisse’s stature in tech banking.
The app allows users to send photos and texts to friends that disappear after a few seconds. It has captured more than 100 million monthly active users, but is yet to generate significant revenue. The company’s co-founders, 24-year-old Evan Spiegel and 26-year-old Bobby Murphy, are among the world’s youngest billionaires with a net worth of $1.5 billion each.
Alibaba has been investing heavily overseas, targeting companies that could potentially help expand its eCommerce business and mobile presence. Recently, Ant Financial Services Group, an affiliate of Alibaba Group Holding Ltd, has taken 25 per cent stake in Noida-headquartered One97 Communications (One97), which runs Paytm, to support the latter's mobile payment commerce platform in India.
The deal represents Ant Financial's first ever investment in an Indian company. Ant Financial also runs Alipay Wallet, which is the largest mobile payment service provider in China with over 190 million users.
Alibaba also signed a MoU with CII (Confederation of Indian Industry) to strengthen the bilateral trade relation between Indian and Chinese SMEs. As a part of this move, CII and Alibaba.com will come up with key initiative like online promotion via global online platform which is likely to open various trade opportunities for both the nations.