E-commerce company Alibaba is set to invest $200m in US-based personal messaging service Snapchat at a $15bn valuation, Bloomberg reported yesterday citing two people familiar with the situation.
The two companies have entered talks over the investment, which Bloomberg stated would be made separately to a $500m round Snapchat is looking to raise at a $16bn to $19bn valuation.
However, a source has told TechCrunch that Alibaba’s involvement is part of a $500m round that would also include Saudi Arabian investor Prince Alwaleed Bin Talal, chairman of investment holding company Kingdom Holding Company.
Alwaleed, whose personal fortune is estimated at more than $22bn, met with Spiegel earlier this month.
Founded in 2011, Snapchat became famous as a service where users could send pictures to each other that would disappear a few seconds after being opened.
The company has since expanded that into a narrative stream called Snapchat Stories, diversified into videos, text messaging and money transfer, and introduced advertising in a bid to monetise the service.
Snapchat has so far secured about $630m in funding, $485m of which was raised from a total of 23 investors including internet company Yahoo, over the course of 2014.
Other investors in Snapchat include internet portal Tencent, which took part in the company’s $80m series B round in 2013, as well as Kleiner Perkins Caufield & Byers, Lightspeed Venture Partners, Benchmark, General Catalyst Partners, SV Angel, Institutional Venture Partners and Coatue Management.
Alibaba previously began talks with Snapchat last year over a substantial investment that would have been made at a $10bn valuation, only to subsequently pull out as it prepared for its initial public offering.