Alibaba to invest US$200m in Snapchat – values social network at US$15bn

12 Mar 2015

Chinese e-commerce giant Alibaba is planning to invest US$200m in mobile messaging app Snapchat in a round that could value the company at around US$15bn.

The investment will add to the growing coterie of companies that Alibaba has been investing in, including Tango, ShopRunner and Lyft, sparking speculation that the company is moving into the US market by stealth.

Alibaba, the Chinese online retailer headed by ex-schoolteacher Jack Ma, made an historic IPO last year valuing the company at US$231bn.

Rumours of Alibaba’s interest in Snapchat emerged as early as July last year when it was revealed talks were underway.

In recent weeks Alibaba spent US$590m to gain a minority stake in Meizu, one of China’s up and coming smartphone makers.

Snapchat is in the vanguard of the latest generation of social media companies that exist primarily as a mobile experience. Users can send photos, videos, text and drawings that can disappear after 10 seconds.

The company was founded on the campus of Stanford University by Evan Spiegel, Reggie Brown and Bobbie Murphy.

As of last year the app’s users were sending 700m photos and videos per day, while Snapchat Stories content were being viewed 500m times per day.

Snapchat is also rapidly becoming the go-to place for online publishers to amplify their content. In recent weeks Snapchat forged a deal with Sky to put Sky News and Sky Sports into Snapchat Discover, potentially increasing its audience reach to millions of young people across the UK and Ireland.

Alibaba image via Shutterstock

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years