Snap Inc has secured a $250 million investment from Saudi Prince Al-Waleed to help it survive its financial woes. Talal tweeted a video of him and Snap CEO Evan Spiegel, noting that he’s invested $250 million in exchange for a 2.3 per cent stake in Snap Inc. The investment raises questions about what say the Saudis will have in Snapchat’s direction.
The investment comes at a $10.8 billion valuation — a steep discount to Snap’s $17 billion market cap. That indicates the company may have been eager to squirrel away cash as losses deplete its cash reserves.
إستثمرت ٩٥٠ مليون ريال سعودي لاتمام صفقة شراء حصة بنسبة ٢,٣٪ في شركة سناب شاتhttps://t.co/XXOgEvEB2W
— الوليد بن طلال (@Alwaleed_Talal) August 7, 2018
According to TechCrunch, “Snap could be looking for more allies abroad as it’s seen weak international growth after years of neglecting the developing world and its Android app’s performance. While the Rest Of World region is typically a source of growth for social networks, Snap actually shrank by 1 million daily active users there. The one truly bright point of its earnings report was a 65 per cent quarter-over-quarter boost in average revenue per user in the Rest Of World, reaching $0.96.”
TechCrunch noted that: “The Saudi royal family’s involvement could potentially pave the way for partnerships or growth opportunities in the Middle East at a time when Snap needs whatever help it can get.”