Alibaba invests US$200m in blocked-in-China messaging app Snapchat

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Published: 12:45pm, 12 Mar 2015Updated: 3:10pm, 20 Jun 2018

Chinese e-commerce giant Alibaba Group has invested in US photo messaging app Snapchat, according to multiple reports.

Citing sources close to both companies, Bloomberg reports the deal is worth US$200 million, giving Snapchat a valuation of US$15 billion and rocketing the messaging app up the charts of the richest start-ups after many forecast disaster following CEO Evan Spiegel's decision in 2013 to turn down a US$3 billion offer from Facebook to buy the company outright.

According to reports, Snapchat was in discussions last month to raise US$500 million for a valuation of between US$16 billion to US$19 billion. Alibaba's planned investment would fall outside of that round of financing, a person familiar with the situation told Bloomberg.

The Snapchat investment is Alibaba's latest expansion into the Silicon Valley start-up scene. Previously the firm invested in video call app TangoMe, mobile search profider Quixey, and ride-hailing service and Uber competitor Lyft.

Snapchat, which has around 200 million monthly active users, primarily in the US, lets users send photos and videos which self-destruct after a defined period of time (usually around 10 seconds).

Lu Jingyu, a mobile internet analyst with Beijing-based consultancy iResearch, said Alibaba has been trying to enter the mobile social networking market for some time now, but its own products have failed to get a foothold in the face of stiff competition.