New York: Alibaba Group Holding Ltd plans to invest in Snapchat Inc., the mobile application for sending disappearing photos, at a valuation of $15 billion, people familiar with the situation said.

China’s biggest e-commerce company intends to invest $200 million, said the people, who asked not to be identified because the discussions are private.

Snapchat is part of a breed of startups with multibillion-dollar valuations, with investors lining up to offer financing. With the latest deal, Snapchat would be ranked behind only mobile car-booking application Uber Technologies Inc. and Chinese smartphone maker Xiaomi Corp., according to data compiled by researcher CB Insights. Xiaomi is pegged at $45 billion, while Uber’s latest round valued it at $40 billion.

“We continue to hire across the business," chief executive officer (CEO) Evan Spiegel said at the Montgomery Summit in Santa Monica, California. He declined to comment on fundraising efforts, adding, “We are famous for not talking about the future."

Snapchat, based in Los Angeles, was in discussions last month to raise $500 million in a round of financing that could value the company at $16 billion to $19 billion, a person familiar with the situation said at the time. Alibaba’s planned investment would be outside of that round, one of the people said Wednesday. Alibaba declined to comment on the funding.

High valuations

Alibaba was also involved in discussions last year to invest in Snapchat ahead of the marketplace’s initial public offering (IPO) in September, although a deal didn’t happen.

Snapchat lets people take and draw on photos, then send them to select friends or add them to a public “story." The photos and videos disappear seconds after the recipient views them. The company says its users—the app is popular among teens—send more than 700 million disappearing “snaps" and view more than 500 million stories daily.

Spiegel started Snapchat in a Stanford University fraternity house in 2011 and turned down a $3 billion acquisition offer from Facebook Inc. in 2013. He raised funds from 23 investors at a $10 billion valuation last year. That increase has corresponded with a surge in venture spending to the highest level in more than a decade.

Venture capitalists pumped $48.3 billion into US companies last year, according to data from the National Venture Capital Association and PricewaterhouseCoopers. Bloomberg

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