Report: Snapchat Talking to Alibaba Group Regarding Potential Investment | Adweek Report: Snapchat Talking to Alibaba Group Regarding Potential Investment | Adweek
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Report: Snapchat Talking to Alibaba Group Regarding Potential Investment

Potential valuation reportedly $10 billion

Photo messaging service Snapchat held talks with Chinese Internet giant Alibaba Group about a potential investment, Bloomberg News reported. The pioneering disappearing messaging service received a reported potential valuation of $10 billion, although "The talks are ongoing and the terms of the funding may change," an anonymous source told Bloomberg News.

Snapchat is by far the leader in the disappearing photo messaging space, a category the application invented. The application's popularity spurned a host of other applications attempting to offer a similar service, such as Facebook's Poke and Instagram's Bolt. So far, none of the competitors have really caught on.

Snapchat is also valuable to potential investors for its audience of 13-25 year-olds, 70 percent of whom are female, according to Snapchat CEO Evan Spiegel. Snapchat users sent each other over 700 million messages daily as of last November, according to the company. According to mobile analytics company App Annie, the application was one of the top 25 most downloaded applications in the Apple App Store last year. So while outlets like The New York Times pointed out that Snapchat does not yet have a strong revenue stream, the infrastructure for one seems to be there.

Alibaba Group's interest shows that Snapchat's potential is too strong to ignore. As The New York Times reported, Alibaba has been stepping up its venture capitalism investments—including stakes in Sina Corporation’s social media program Weibo and the messaging app Tango—in anticipation of a high-profile initial public offering, which is expected in September. Some have speculated that Alibaba Group could be valued at over $200 billion, and a deal with Snapchat could cause that number to swell even more.

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