Alibaba Group Holding Ltd., China’s leading e-commerce company, is investing in the messaging firm Snapchat, revealing that the technology startup’s value is worth $15 billion.
According to individuals familiar with the deal, the total amount of Alibaba's investment is $200 million.
The recent valuation to the messaging company is considered as a significant increase from previous deals.
In 2014, Snapchat received a $10-billion valuation from two investing companies, Yahoo, Inc. and Kleiner Perkins Caufield & Byers, the latter is a venture-capital firm.
Snapchat also had the following as its investors: General Catalyst Partners, Lightspeed Venture Partners, Institutional Venture Partners, Benchmark, DST Global and Coatue Management LLC.
As early as July last year, The Wall Street Journal has already reported about the Alibaba-Snapchat deal. However, one of those familiar with the transaction revealed that the e-commerce giant's interest has cooled down but has recently rekindled.
In a Wall Street Journal analysis, one of the reasons why Snapchat has been attracting investors is the nature of its messages--they disappear after a certain period of time. By market valuation, the messaging company is considered as one of the most valuable tech startups in the world.
Snapchat has more than 100 million users, people who were briefed with its internal metrics stated.
Meanwhile, CEO Evan Spiegel announced its plans to intensify his goal of turning his free instant messaging app into a moneymaker. Recently, the company began receiving its first revenue as it ventured on advertisement deals with marketers such as Universal Pictures and Samsung Electronics Co.
As for Alibaba, Snapchat is an addition to its roster of investments in startups. It has also invested in U.S. companies such as TangoMe, Inc., a video call app maker, and Quixey, Inc., a mobile search provider.
In China, the e-commerce giant increased its stake in the social media company Weibo Corp. In addition, it has also invested in its own chat app, Laiwang.