Messaging service Snapchat is now valued at $15 billion, a $5 billion increase over its last funding round in 2014, which was led by Kleiner Perkins and Yahoo! and which left the startup with a valuation around $10 billion.
China’s e-commerce powerhouse has dropped $200 million into Snapchat, according to The Wall Street Journal. The Journal has been reporting on the possibility of an Alibaba investment into Snapchat since July of last year; according to sources close to the matter, Alibaba took an initial interest in buying Snapchat only to see its interest dwindle and then rekindle.
Snapchat’s popularity with investors comes from the “ephemeral” nature of the its messaging. Snapchat has texts and photo messages self-destruct after a set time limit – meaning that Snapchat doesn’t have the same sort of life-destroying effect that inopportune Facebook photos and impulsive tweets do. It is estimated to have over 100 million users.
However, users do not necessarily mean dollars in the online social world, and the company is still developing revenue streams. Snapchat has recently tied more fully into advertising as a potential monetizer – CEO Evan Spiegel reportedly draws his inspiration from how Southeast Asian chat apps have integrated themselves into the commerce ecosystem.
For Alibaba, this is the latest in a string of investments in startups that also include Lyft and Tango. Alibaba is also now sharing an investment with their rivals Tencent. Tencent, the owners of the WeChat messaging app, has invested in Snapchat in the past.
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