One of the largest photo sharing platform Snapchat, got a fresh funding from the Saudi royal family to help it in surviving despite losing the $353 million in this quarter. The Saudi Arabia Prince Al-Waleed Talal tweeted on a twitter a video of him and Snap CEO Evan Spiegel, that he has invested more than $250 million in exchange for 2.3 percent stake in then Snapchat. There is a long question that why Saudi people invested in the Snapchat.
The investment comes at a valuation of $10.8 billion valuation which makes the Snapchat to a market capitalization of $17 billion valuations. That indicates the company may have been so eager to squirrel away cash as losses deplete its cash reserves.
The company declined to make any of the comment on the news, but after an initial drop with 11 percent earning was announced, Snap shares sank to just below the closing since as the user shrinkage and Investment of Saudi in.
Previously Al-Waleed Talal has invested in the US tech sector by investing in the startup which includes the Twitter and Lyft. Moreover, recently he made an investment in European streaming music service which is Deezer as well as the China largest e-commerce platform JD.com. Previously he also owned the shares of Citigroup and Newsgroup.
Snap could be searching for more partners abroad as it's seen powerless worldwide development following quite a while of disregarding the creating scene and its Android application's execution. While the Rest Of World locale is regularly a wellspring of progress for friendly communities, Snap indeed shrank by 1 million day by day dynamic clients there. The one brilliant purpose of its profit report was a 65 percent quarter-over-quarter help in ordinary income per client in the Rest Of World, achieving $0.96. The Saudi imperial family's association could conceivably make ready for organizations or development openings in the Middle East when Snap needs whatever assistance it can get.
The extra cash will extend Snapchat’s runway and give it more time to stabilize its business. With its daily user count now shrinking, it will have to find creative ways to squeeze more cash out of those that remain to keep revenue growing. That may take time, and Saudi Arabia just gave it more.
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