US-based instant messaging app Snapchat has entered talks with internet and e-commerce company Alibaba as part of a funding round that could value it at $10bn, Bloomberg reported yesterday.
Founded in 2011, Snapchat has created an app that enables users to send picture messages to each other that disappear after a few seconds. It added an option to send text messages in May this year.
Snapchat has so far raised approximately $124m in funding, most recently a $50m series C round funded entirely by private equity firm Coatue Management in December 2013.
Coatue’s investment came shortly after reports suggesting internet portal Tencent was set to lead a $200m round that would have valued the app at $3.6bn to $4bn. Facebook reportedly offered $3bn to buy Snapchat in 2013 but was rebuffed.
Tencent previously participated in a $60m round for Snapchat in June 2013 along with Institutional Venture Partners, Benchmark Capital, Lightspeed Venture Capital, General Catalyst Partners and SV Angel that valued it at $800m.
Alibaba launched a US fund in October 2013 and has since made significant investments in social networking app Tango and ride sharing app Lyft.