Yahoo is close to investing in Snapchat in a funding round that values the start-up at US$10 billion, a source said. The web portal was the lead investor in the financing and set the terms of the round, the source said. Venture capital firm Kleiner Perkins Caufield & Byers had also invested as part of the Snapchat funding, sources said. Yahoo separately agreed to buy mobile-chat platform MessageMe for less than US$12 million, sources said. The moves continue a spate of acquisitions and investments that Yahoo has embarked on under chief executive Marissa Mayer. Yahoo is working to build up its offerings in areas such as mobile and messaging that are attracting many new users. The firm is under increasing pressure to reveal how it plans to shore up its core online advertising business, with activist investor Starboard Value last month pushing Yahoo to stop making acquisitions and to consider breaking itself up or combining with AOL. Snapchat, a firm that makes a mobile application for sending disappearing photo messages, is part of an elite group of technology start-ups commanding 11-digit valuations amid a financing boom in Silicon Valley. Other closely held companies that are valued at US$10 billion or more include house-sharing app Airbnb and file-sharing company Dropbox. In June, car-booking app Uber Technologies raised US$1.2 billion at a valuation of US$17 billion. Yahoo has done more than two dozen deals since Mayer became chief executive in 2012. This year, it acquired start-up analytics provider Flurry for more than US$300 million. Last year, Mayer made her biggest deal in purchasing blogging service Tumblr for about US$1 billion. Yahoo reaped more than US$9 billion before taxes last month by selling part of its stake in mainland e-commerce company Alibaba at its initial public offering. Yahoo had said in July it would return at least half of the cash to shareholders, while not laying out any plans for the balance of the proceeds. Yahoo may be trying to emulate what it did with Alibaba. In 2005, it invested about US$1 billion in the firm. It still holds a stake of more than 10 per cent in Alibaba, even after selling shares in last month's IPO. Snapchat competes with Facebook, which tried to buy Snapchat for US$3 billion last year. Snapchat said in May it was adding an option for users to chat with text, joining an increasingly crowded mobile-messaging market that also attracted Facebook. The social network agreed to pay about US$19 billion for messaging app WhatsApp in February.