It was reported that, Chinese e-commerce giant Alibaba is investing $200 million (£133 million) on popular messaging application Snapchat. Market experts are saying that, this will make the four year old company valued at nearly $15 billion (£10 billion) and ranks top among the privately held startups.
It was reported that, the Chinese company which handles more online business than Amazon and eBay combined is trying to build up a mobile service portfolio in U.S.A. But it was previously reported that, the Snapchat application is banned in China. In recent time’s consumers are using Alibaba in their mobile and tabs in higher volume than before. Market experts are saying that, Alibaba was trying to develop mobile without any success.
It was previously reported that, China’s biggest social networking and Entertainment Company Tencent also invested in Snapchat in 2013. In a statement Duncan Clark, Managing Director of Beijing-based tech consultancy BDA said “China’s large internet firms are making these investments partly as a defensive move against each other, with potential for financial returns and partnering in China if regulations permit”. Then he added, “Its better from their perspective from earning virtually nothing on their cash in the bank. These are small bets for them”.
Business analysts are saying that, this is a massive valuation increase for Snapchat. In 2013 Facebook wanted to buy Snapchat for $3 billion. It was suggested that now Snapchat has more than 100 million users worldwide. They were looking for investments for a long time to extend their core services. From the beginning of this year, Snapchat began streaming videos and articles from main stream media outlets like CNN and ESPN.
Business analysts are suggesting that, Alibaba may use the Snapchat`s service as a payment gateway as they want to reach consumers and merchants in China and U.S.A. They said it will also make the cross border payment to Alibaba much stress-free than before. In November last year Square Snapchat began a service where users can send money to each other in partnership with online payment gateway.
