Alibaba Group Holding Ltd (NYSE:BABA) values photo sharing platform Snapchat at $15 billion, if reports of a $200 million investment on Fox Business are anything to go by. The investment by Alibaba does not come as a surprise as Snapchat has on its ranks respected banker, Imran Khan, as its chief strategy officer who helped the giant e-commerce to IPO last year.
Alibaba is reported to have been in talks to invest in Snapchat last year before going public although a deal never materialized. Fox business Jo Ling Kent reports that Alibaba Group Holding Ltd (NYSE:BABA) has been pursuing other investment deals in the recent past that have seen its valuation skyrocket compared to other well-established brands.
“At levels like that, Snapchat may be worth just as much if not more than companies like Kohl’s Corporation (NYSE:KSS), Stanley Black & Decker, Inc. (NYSE:SWK), Nordstrom, Inc. (NYSE:JWN), and Dr. Pepper Snapple Group Inc.(NYSE:DPS),” said Mrs. Kent.
Snapchat falls into a breed of startups at the center of multibillion-dollar valuations that continue to attract investors from all fronts. Investing in Snapchat will fall in line with Alibaba Group Holding Ltd (NYSE:BABA)’s push to expand beyond its core business of e-commerce as the company continues to add more businesses in the fields of finance and entertainment.
The photo sharing platform lets people take and draw photos, which can be sent to select friends and disappear immediately after being viewed. Alibaba Group Holding Ltd (NYSE:BABA) may not be the only investor interested in the photo sharing startup as more investors continue to show interest.
“The $15 billion valuation comes after Snapchat most recent meeting with another big potential investor Saudi Prince Alwaleed Bin Talal. He is chairman of Kingdom Holding and discussed ‘future potential business corporation’ with Snapchat, no word yet if any cash has changed hands there,” said Mrs. Kent.
The $15 billion valuation by Alibaba Group Holding Ltd (NYSE:BABA) comes even as Snapchat continues to struggle to generate revenues, despite having 100 million active users on its ranks sharing over 700 million photos a day. Snapchat is reported to have turned down a $3 billion bid from Facebook Inc (NASDAQ:FB) two years ago as the startup continues to look for $500 million in funding from private investors.
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