News Digest

Alibaba plows $200 million into Snapchat in latest deal

Alibaba Group Holding Ltd., the Chinese e-commerce giant, has struck its latest Silicon Valley deal by investing $200 million in the photo-messaging app Snapchat, sources familiar with the transaction said. The deal values Snapchat at around $15 billion, according to Bloomberg, putting the 4-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. Tencent, China’s biggest social networking and entertainment company, also invested in Snapchat in 2013, TechCrunch reported at the time.

We know that Tencent powered ahead of Alibaba in mobile with WeChat, so Snapchat as the ‘it’ company for youth social networks in the West has an obvious appeal.

Duncan Clark, managing director of the Beijing-based tech consultancy BDA

The Los Angeles-based 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. But possibly more alluring to Alibaba is that in November, Snapchat launched a service to let users send money to each other, in a partnership with the online payments company Square.