Chinese e-commerce giant Alibaba investing money ahead of its upcoming US IPO
Video messaging service Tango has received $215m in funding from Chinese e-commerce giant Alibaba.The investment values Tango at around $1.1bn, according to analysts, meaning Alibaba has taken around a 20 percent stake in the company.
Tango, which offers a free video messaging service similar to Microsoft’s Skype and Apple’s FaceTime, currently boasts over 200 million registered users and 70 million active users worldwide, with key markets being North America, the Middle East, Taiwan and Singapore.
You’ve just been Tangoed
News of Alibaba’s investment comes a month after Japanese e-commerce company Rakuten announced it was buying Viber, one of Tango’s main rivals, for $900m, and follows Facebook’s acquisition of popular instant messaging service WhatsApp for $19bn several weeks ago, highlighting the increased importance of messaging apps in the technology industry.
“Tango has exhibited tremendous growth because of its unique approach to combine free communications, social and content,” Joe Tsai, executive vice chairman of Alibaba Group, said. “We were simply blown away by the vision and quality of the team at Tango and believe they have a disruptive way of looking at the mobile and messaging opportunity.”
Alibaba’s investment is the majority part of a $280m round of funding completed by Tango, which also includes funding from existing investors, including Access Industries, Draper Fisher Jurvetson and Jerry Yang, a co-founder of Yahoo, the company said.
Yang, a close friend of Alibaba executive chairman Jack Ma, runs the investment fund Ame Cloud Ventures (which owns 24 percent of Alibaba) and introduced the two companies.
“Alibaba very much like what Tango wants to do, and Tango felt Alibaba could be a good investor,” Yang told Forbes. “Tango as a messaging platform is enabling a lot of commerce and content. That is clearly, I think, an area of interest to Alibaba.”
Alibaba recently announced plans for a US IPO which could value the company at around $200bn, making it one of the most valuable technology companies in the world. It previously planned for a flotation on the Hong Kong Stock Exchange, but suspended these plans following issues surrounding its management structure.
“Alibaba Group has decided to commence the process of an initial public offering in the United States,” the company said at the time. “This will make us a more global company and enhance the company’s transparency, as well as allow the company to continue to pursue our long-term vision and ideals.”
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