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The talks are ongoing and the terms of the funding may change, said one of the people, who asked not to be identified because the talks are private.

Snapchat’s popularity has continued to grow, with people sending more than 700 million disappearing “snaps” a day and more than 500 million stories viewed daily, the company has said. It now competes with Facebook Inc., which tried to buy Snapchat for US$3 billion last year and started its own product to send ephemeral photos and videos after being rebuffed.

Snapchat said in May it was adding an option for users to chat with text, joining an increasingly crowded mobile-messaging market that also attracted Facebook. The social network agreed to pay about US$19 billion for WhatsApp Inc. in February.

Tech Startups

Jim Wilkinson, a spokesman for Alibaba, declined to comment, as did Mary Ritti, a spokeswoman for Venice, California-based Snapchat.

Technology companies including house-sharing app Airbnb Inc. and file-sharing company DropBox Inc. have both recently raised money at US$10 billion valuations. In June, car-booking app Uber Technolgies Inc. raised US$1.2 billion at a record-breaking valuation of US$17 billion.

Alibaba, China’s biggest e-commerce company is building a presence in the U.S. as it prepares to go public with a listing on the New York Stock Exchange this year, in what could be the biggest IPO in U.S. history.

Last year, Alibaba started a U.S.-based fund to invest in e-commerce and emerging technologies, led by Michael Zeisser, who previously led Liberty Media Corp.’s Internet strategy.