Do you think Snapchat is worth $15 billion? Alibaba seems to thinks so, as do several others. Alibaba alone plans to invest $200 million in the ephemeral messaging app, although it has since evolved into something more, which doesn’t even include the $500 million that Snapchat is raising from other investors. Neither company has confirmed the investment and it isn’t clear why Alibaba is so interested in Snapchat.
Alibaba Group Holding Ltd. plans to invest in Snapchat Inc., the mobile application for sending disappearing photos, at a valuation of $15 billion, people familiar with the situation said. China’s biggest e-commerce company intends to invest $200 million, said the people, who asked not to be identified because the discussions are private. Snapchat is part of a breed of startups with multibillion-dollar valuations, with investors lining up to offer financing. With the latest deal, Snapchat would be ranked behind only mobile car-booking application Uber Technologies Inc. and Chinese smartphone maker Xiaomi Corp., according to data compiled by researcher CB Insights. Xiaomi is pegged at $45 billion, while Uber’s latest round valued it at $40 billion. “We continue to hire across the business,” Chief Executive Officer Evan Spiegel said at the Montgomery Summit in Santa Monica, California. He declined to comment on fundraising efforts, adding, “We are famous for not talking about the future.”