Tencent could play a role redesigning Snapchat following $2B Investment

Tencent Holdings Ltd, the Chinese investment holding and internet giant valued at $470 billion, may have a hand in rebooting the Snapchat app to make it more competitive with Instagram and Facebook.  The company said it wanted to work with Snapchat owner Snap Inc to explore mobile games publishing and a news feed.

“The investment enables Tencent to explore cooperation opportunities with the company on mobile games publishing and newsfeed as well as to share its financial returns from the growth of its businesses and monetization in the future,” a Tencent spokesperson told Reuters in a statement.

Tencent now holds 12{4c121b525f261b6e9cd1def8a3985dbe850ad058af7b7776b0968f5bd69c65ba} shares for a spend of $2 billion. The company said it is nicely positioned  to enable Snap to dig into its experience of growing WeChat, China’s dominant messaging app which boasts 800 million monthly users worldwide, and potentially tap into other business lines, including its games business which includes Clash Of Clans maker Supercell.

Tencent first invested in Snap in 2013 although the size of its stake in the company is not public information. The company has long standing interest in US companies with some big numbers in it portfolio like  chat app Kik, Tesla and games firm Activision, while it has invested in global messaging apps like Hike in India and South Korea’s Kakao.

This experience is likely to be welcomed by Snap as it looks for what trends will come next in messaging and alternative ways it can engage users to compete with Instagram.

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