Alibaba is investing $200 million in Snapchat, a source familiar with the deal said, striking its latest Silicon Valley deal as the Chinese ecommerce company builds up mobile services.
The investment values the company at around $15 billion, according to Bloomberg, citing people familiar with the situation. This places the four-year-old company into the top ranks of privately held startups.
Snapchat’s latest valuation is a massive increase for a company that Facebook offered to buy in late 2013 for $3 billion.
Snapchat, which allows its more than 100 million users to send messages that disappear in seconds, had sought capital to extend its core service. In January, it began carrying videos and articles from mainstream media outlets such as CNN and ESPN, bringing Snapchat into closer competition with Facebook and Twitter
It is unclear what value the startup would bring to Alibaba, which handles more online commerce than Amazon and eBay combined. The Chinese company, which has been coping with a steady increase in shopping via smartphones and tablets, has made it a priority to develop mobile services.
Silicon Valley insiders who have held discussions with Alibaba say its U.S. deals are central to its strategy of becoming the world’s dominant e-tailer. Snapchat would rank amongst its largest investments in the country so far.
Snapchat did not respond to requests for comment.
