Alibaba invests $200 m in Snapchat



Alibaba invests $200 m in Snapchat

Alibaba invests $200 m in Snapchat

Major Chinese holding Alibaba Group is investing in the Snapchat mobile application for the exchange of self-destructing photos. The messenger’s valuation increased to $15 bn as a result of the transaction.

Two sources close to the transaction informed The Wall Street Journal that the major Chinese e-commerce platform Alibaba Group had invested $200 m in the US-based Snapchat service. Investors value Snapchat at $15 bn, the newspaper reports. Snapchat previously received funds from Yahoo Inc. and the Kleiner Perkins Caufield & Byers venture fund in 2014, Bloomberg reports. Yahoo was able to invest $20 m in the application. At the time, investors valued the messenger at $10 bn, enabling the company to make The Wall Street Journal’s list of the most valuable start-ups. Other investors in Snapchat included billionaire Yuri Milner’s DST Global fund, US venture fund Benchmark, US venture companies General Catalyst Partners, Institutional Venture Partners, and Lightspeed Venture Partners, and the investment company Coatue Management LLC.

The Wall Street Journal reported on the first negotiations between Alibaba and Snapchat in July 2014. The free Snapchat application allows users to send photos and images that disappear within a few seconds after being viewed. The company was founded in 2011 by Americans Evan Spiegel and Bobby Murphy. In July 2014, the service’s monthly audience reached 100 m users according to the BI Intelligence research division of the Business Insider news portal.

In October 2014, the messenger reported on its blog that Snapchat would start using advertising. The service’s team promised that ads would only appear in the service menu, but not in personal conversations. “A lot of folks want to know why we’re introducing advertisements to our service. The answer is probably unsurprising – we need to make money,” Snapchat said in a statement.

Alibaba Group is a major Chinese holding that controls 80% of e-trade in China. More than half of all parcels delivered by Chinese post are ordered on websites that belong to the holding. Russian billionaire Alisher Usmanov is a shareholder in Alibaba. In 2011, a consortium of funds that included DST Global (which is owned by Usmanov and billionaire Yuri Milner) purchased a 5% stake in Alibaba for $1.6 bn. The Alibaba Group had capitalization of $203.93 bn as of March 12.

Source: http://www.rbc.ru (Russian)

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