Alibaba To Go Mobile With Snapchat Acquisition
Alibaba Group Holding is reportedly investing $200 million in photo-messaging app Snapchat, as the Chinese e-commerce major is looking to build up mobile services. The investment values the company at around $15 billion, according to Bloomberg, citing people with knowledge of the matter.
US-based Snapchat’s latest valuation is a massive increase for a company that Facebook offered to buy in late 2013 for $3 billion. Snapchat allows 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 it into closer competition with Facebook and Twitter.
While neither Alibaba nor Snapchat clarified what value the acquisition will bring as Alibaba handles more of online commerce. However, experts believe it is coping with a steady increase in shopping via smartphones and tablets, has made it a priority to develop mobile services.
The e-commerce powerhouse, which was even 2-3 years ago nearly unknown to most Americans, always had ubiquitous roots in China. Founded by Jack Ma, who maintains strong control and large ownership over the company has often being compared with Steve Jobs, owing to his obsession with innovation, charm and spiritualism, has time and again proved his mettle in the online retailing space.
Alibaba, which created history, having a market capitalization of roughly $219.8 billion, according to FactSet. That makes the company bigger than some of the US technology industry’s most successful names, such as Facebook, eBay, and even Amazon.com Even since Alibaba moved to US and offered American retailers new ways to sell to China’s vast and growing consumers. It has invested in a raft of US startups including rides-on-demand service Lyft and messaging app Tango. According to experts, Snapchat would rank amongst its largest investments in the country so far.
A month ago, Bloomberg reported that Snapchat is looking to raise as much as $500 million in a new funding round that would value the Los Angeles-based company at up to $19 billion.
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