Investment firm values Snapchat at £6 billion

<p>Snapchat, a messaging app created by two US students, is allegedly worth £6 billion. </p>

Messaging app Snapchat could be sold for billions of dollars after an investment firm agreed to invest $20 million in the company, valuing it at $10 billion (£6 billion).

Kleiner Perkins Caufield & Byers is a renowned firm based in the Silicon Valley that was an early backer of Google and Amazon. The deal would turn Snapchat into one of the world’s most valuable private tech startups, despite the fact that it has not yet generated any revenue.

The Wall Street Journal – which unveiled the evaluation – reported that the app has more than 100 million monthly users, approximately half of its rival Instagram.

Created by two US university students and led by chief executive officer Evan Spiegel, Snapchat lets users communicate by sending each other photos that automatically delete after a few seconds.

It is the third-most popular app among millennials after Facebook and Instagram, and is used by 33 per cent of 18-to-34-year-olds in the US, according to ComScore Inc.

Snapchat has declined to comment on the report : "The valuation of our business and our capital requirements are the least exciting aspects of supporting the Snapchat community," Mary Ritti, a spokeswoman at Snapchat, wrote in an e-mail yesterday (August 26th). “We have no further comment at this time.”

Last month Bloomberg reported that Snapchat was in talks with Alibaba over a funding round that would also value it at $10 billion, but reports later indicated those talks had broken down.

According to the Wall Street Journal, Russian investment firm DST Global also invested in Snapchat earlier this year at a valuation of $7 billion.

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