The next $10bn startup? Snapchat is 'raising funding from Alibaba'

LAUNCHPAD: Facebook failed to buy Snapchat for $3bn last year. Looks like its founders were right to turn down Zuckerberg.

by Rachel Savage
Last Updated: 02 Jan 2015

It’s not every day Mark Zuckerberg comes a-knockin’ waving a few billion dollars in your face - unless of course you’re a messaging startup like Whatsapp or Snapchat. The Facebook founder bought the former for an eyewatering $19bn (£11.2bn), after the latter snubbed a reported $3bn takeover offer last November.

Now it looks like Snapchat founder and chief exec Evan Spiegel may have been right to snub the social network. The app, which lets users send self-destructing photo messages, is said to be in talks with investors including Chinese e-commerce giant Alibaba, about funding which could value it at a staggering $10bn, according to Bloomberg.

Snapchat has already raised $113m from various venture capitalists since it was founded in 2011. The deal, the terms of which sources told Bloomberg could yet change, would rank Snapchat with room rental app Airbnb and file-sharing service Dropbox in the $10bn startup club (private hire car company Uber has already gone one further and raised $1.2bn at an eyewatering valuation of $17bn).

It does seem a bit like the silly money that was splurged at the height of the millenium dotcom bubble back. After all, Snapchat, which reportedly had 30 million monthly active users back in December, doesn’t actually make any money yet.

But given that Facebook’s attempts at self-deleting messaging have yet to take off (although Instagram, which it owns, is launching an ephemeral picture app called Bolt), if Snapchat can figure out how to monetise its snap-happy users, it could end up being a good investment.

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