The Chinese giant behind WeChat, Tencent, is taking a 10% stake in Snap

Evan Spiegel, the CEO of Snapchat's parent company, Snap.

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Evan Spiegel, the CEO of Snapchat’s parent company, Snap.
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Reuters

    Tencent, the giant Chinese investment holding company behind WeChat, has purchased a 10% stake in Snap Inc.The news arrived a day after Snap’s third-quarter earnings results, in which the company reported numbers that badly missed Wall Street’s expectations.

The Chinese investment giant behind WeChat, Tencent, has purchased a 10% stake in Snap, the parent company of the popular social network Snapchat, by purchasing 145.8 million nonvoting shares over the past quarter.

The news comes as a vote of confidence in the company, which on Tuesday reported third-quarter earnings that failed to meet Wall Street’s expectations and made the stock dive in after-hours trading.

Over the past three months, Snapchat added only 4.5 million new users, a mere 3% increase over the previous quarter. The company announced plans to redesign the app with the aim of making it more accessible.

Snap also had to write off about $39 million, or £29 million, in unsold Spectacles, its camera-equipped glasses that let users take photos and videos without firing up the mobile app from a phone.

This new investment isn’t the first time that Tecent and Snap have crossed roads.

Back in late 2012 and 2013, Tencent invested in Snapchat through a series of private rounds of funding. An additional deal in which CEO Evan Spiegel and cofounder Bobby Murphy apparently asked for $40 million in secondary shares failed to materialize in late 2013.

During Snapchat’s early days, Speigel referred to Tecent as a “role model.” WeChat, which is hugely popular in China, relies heavily on scannable QR codes that work like the yellow profile “Snapcodes” used by Snapchat.