Popular mobile-messaging app Tango has every reason to tango, following the investment of $215 million of Chinese e-commerce giant Alibaba Group Holding Ltd. on Wednesday.
This came after Facebook's acquisition of WhatsApp, Tango's rival, for a $19-billion deal.
"We ... believe (Tango has) a disruptive way of looking at the mobile and messaging opportunity," executive vice chairman Joe Tsai of the Alibaba Group said. The investment gave Alibaba a minority stake in the company plus a seat on its board.
Alibaba has confirmed its plan to go public in the stock market in the U.S., holding a $100 billion valuation. It didn't declare any particular date, though.
Sometime in 2013, Alibaba also banked in on large investments in some key areas of mobile technologies, including social media, mapping and e-commerce to lead more users to its two marketplaces online, which are Tmall and Taobao.
Alibaba has been investing large sums of capital in key areas of mobile technologies such as social media, mapping and e-commerce to bring more users to its two online marketplaces, Taobao and Tmall. It has its own messaging app called Laiwang, which aims to compete with WeChat. A month after its launch, Alibaba revealed Laiwang reached more than 10 million users.
However, Alibaba isn't the first investor but rather the newest among venture-capital backers of the four-year-old start-up business. Other previous investors include Translink Capital, Access Industries, Qualcomm Ventures, Draper Fisher Jurvetson, Toms Capital and several others.
Persons familiar with the deal said the investment is in part of the $280-million financing round that pegs Tango's so-called worth at more than $1 billion. Research firm VC Experts estimated it at $1.1 billion based on a regulatory filing. Communications specialist Marcos Sanchez believed its worth could go as high as $2 to $3 billion, the USA Today reported. Sanchez has been with Tango for years. The company, however, refused to reveal any valuation of the company with the recent investment deal.
It disclosed rather that the number of registered users of the app swelled to 200 million in 2013, with its monthly active users reaching about 70 million, thanks to its transformation. Its user base, though, is way smaller than its rival messaging apps such as WhatsApp.
Prior to expanding its services to gaming, texting and photo sharing, Tango is among the more-known applications for free video call, which is similar to Face Time of Apple Inc. and Skype of Microsoft Corp.
"This round really validates our vision of going beyond simple messaging," he said, adding that since Tango started adding more social features like song-clip sharing and collaborative gameplay, it has seen engagement double, measured by the portion of people using it on a daily basis out of all its registered users," said Eric Setton, Tango co-founder and Chief Technology Officer.
He added that the company would make use of the money to employ talented people in areas such as engineering, to add more content to its platform such as exclusives with famous musicians and to bring about international growth. It has a significant following in Asian countries, such as Thailand, Singapore, Hong Kong and Taiwan, and in the Middle East.
Among Tango's plan before the end of 2014 is to open its software code allowing any outside developer to create games and other services for its users.