Tencent in $2bn move to acquire a stake in Snap

 

The Chinese group behind messaging App WeChat has Chinese group per cent stake worth  more than $2bn in Snap, the US parent of Snapchat.

US teenagers continue to adore Snapchat, using the app more than 25 times a day, but much of rest of the world remains flummoxed and indifferent. Evan Spiegel, the Los Angeles-based company’s co-founder and chief executive, acknowledged for the first time that Snapchat , which added just 4.5m new daily active  users in the past three months. And its redesigning its app to improve usability, especially for android devices, especially in the hope attracting users from emerging markets.

Snap’s revenue grew  126 per cent year on year to $208m, as net losses more than tripled to $443m. Snap’s executive blamed the shortfall on near term disruption from the shift to automated advertising sales, which use an auction based system that has driven down the prices.

“ We have long been inspired by the creativity and entrepreneurial spirit of Tencent, and we are grateful to continue our long standing and productive relationship that began four years ago” said Spiegel.