Chinese internet giant Alibaba has made a $215m investment in Tango, a Silicon Valley mobile messaging service, in what is believed to be Alibaba’s largest investment in a US company.
The four-year-old company is used by 200m people worldwide and allows video as well as text chats as well as offering games and music. Alibaba joined other investors to pump a total of $280m into the company.
Co-founder and chief technology officer Eric Setton said the Facebook acquisition proved the value of mobile messaging services. He said the money would be used to build Tango’s market share and its technology.
“A whole new level of connection and sharing of experiences is available through messaging apps that fundamentally affects the way content gets distributed on mobile,” he said. “This round of funding will enable us to continue to innovate, hire the best talent, aggressively expand our content partnerships, and build a world-class platform as we go after what is truly a big opportunity.”
Tango is available in 14 languages and has members in more than 224 countries. Its two largest markets are the US and the Middle East, which account for about a quarter of the total each.
Setton did not disclose financial details but said the company was growing revenues using ads and from its cut of the charges on digital games played on Tango.
“Tango has exhibited tremendous growth because of its unique approach to combine free communications, social and content,” said Joe Tsai, executive vice chairman of Alibaba Group. “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.”
The investment comes amid a new tech boom. On Friday King, the game company behind mobile sensation Candy Crush, is set to go public at a price that will value it at $7.6bn.
Alibaba, part-owned by Yahoo, is also planning an initial public offering that analysts estimate could be the largest tech share sale ever and value the company at over $200bn.
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