After learning from its early bet with Chinese online company Alibaba Group Holding Ltd., Yahoo Inc. plans to reinvest a portion of its earnings from the said venture into another rapidly growing startup, Snapchat Inc.

According to sources who are familiar with the matter, Yahoo will be investing around $20 million to Snapchat, which is being valued at $10 billion, Wall Street Journal reports. The mobile-messaging service startup has been aiming to secure capital from different companies, money managers and venture-capital firms. However, spokespersons of both companies have declined to give their respective comments.

Through this investment, Yahoo looks to repeat the success it experienced with investing in Alibaba, but on a much smaller scale. The tech giant acquired a 40 percent stake in the e-commerce company based in China for $1 billion back in 2005. Following Alibaba's recent success, Yahoo earned tens of billions of dollars.

This is not the only deal Yahoo has closed, as the company has continued its spree in acquiring small startups, such as the mobile messaging service MessageMe. According to an earlier report about this deal, Yahoo would most likely use these smaller companies in working on new tools for communication, TechCrunch reports.

Yahoo could use Snapchat as a strategic partner in the distribution of apps, content and ads in the ever-growing mobile industry. Nonetheless, its valuation at $10 billion could mean a risky business since the three-year-old company has yet to turn its service into one that generates revenue.

The Snapchat app allows its users to send photos, videos and messages over a 10-second limit that would typically disappear after the receiver views the content, but the company is planning to debut new services soon. Currently, there are more than 100 million users enjoying Snapchat's unique service.

With the reported funding that includes Yahoo and others, Snapchat becomes one of the mostly highly valuated startup companies.