Remember when Facebook offered to buy Snapchat for $3 billion dollars? Remember when the world thought Snapchat’s founders were crazy for turning that offer down? Well, it looks like Snapchat is set to acquire more than three times that offer.
According to Bloomberg, people with inside knowledge claim that the company is in talks to raise funds from Alibaba Group Holding, Ltd. The valuation on Snapchat is rumored to be somewhere around $10 billion. If all goes to plan, it will make 24-year-old Evan Spiegel, Snapchat CEO, look like a very smart man indeed.
Snapchat wouldn’t be the only party to benefit in any future funding deals. As many as 700 million disappearing messages are sent every day, and Alibaba is looking for any chance it can to increase its holdings in the U.S. The Chinese-based company is expected to launch its first public offering in the U.S. within the next few months. Closer ties with any U.S.-based conglomerates will help bolster U.S. investment interest when the time comes.
Snapchat would not be the first U.S.-based company Alibaba has invested in. Alibaba has already contributed funds to the ride-sharing startup Lyft Inc. Other startups Alibaba has invested in include Fanatics Inc., Shoprunner Inc. and Quixey Inc. Many experts believe that these startups are just the tip of Alibaba’s investing iceberg.
Still, some are a little hesitant to level Snapchat’s value at $10 billion. Though the app is incredibly popular, it makes little to no revenue. Like Twitter, however, it is Snapchat’s enormous user base that keeps many investors interested in its potential to turn into a money-making machine.