Saudi Arabian billionaire Prince Alwaleed Bin Talal has bought $250m worth of shares (2.3 per cent) in social media company Snap, the creators behind Snapchat.
In a report by the BBC, the member of the Saudi royal family was confirmed to have invested the significant sum of money just as the company was starting to have difficulties to build confidence with investors in its Snapchat application.
Prince Alwaleed posted a video to his Twitter account on 7th August where he is seen to be in a meeting with Snap CEO Evan Spiegel.
During the second quarter of 2018, it was reported that the daily active users of Snapchat had dropped by 2 per cent down to 188 million, from 191 million at the end of March.
This new investment comes in at a valuation of $10.8 billion, a significant discount to Snap’s $17 billion market cap. The investment however, brings up questions as to what say the Saudis will have in Snapchat’s future direction.
In 2015, a meeting took place with the Prince and Evan Spiegel and COO Imran Khan of Snapchat to converse about a possible investment but nothing came to light until recently. A press release by Arabic press confirmed that the deal was completed on 25th May.
“Snapchat is one of the most innovative social media platforms in the world and we believe it has only just begun to scratch the surface of its true potential and we are blessed to be part of it,” Prince Alwaleed Bin Talal said in the press release.
The Prince also is chairman at Kingdom Holding Company, separately they have invested into ride sharing company Lyft, social media platform Twitter and digital service Deezer.