Another giant takes the bait and leaps to the Messaging sphere, the Chinese Internet giant Alibaba in investing $215 million for a 20%-25% stake in the messaging and VOIP app Tango.
Tango based in Mountain View, California, was started to compete with the like of Skype and Facetime to provide a free service facilitating messaging and Video-Calling over the internet, play games and share photos between the users of the app.
Tango was valuated at around $1.1 billion by the research firm VC experts based on the regulatory filing, and expect the stake of Alibaba to be close to 25%, this is a part of the investment funding round headed by Alibaba for a total of $280 million, which is also encouraging current and new investors to invest more to reach the total.
Tango presently has 200 million registered users with roughly 70 million active users monthly and generates the revenues partly from the sales from ads and partly from partnering with the game developers on revenue sharing deals. Tango has till now distributed about 30 game titles and has recently partnered with Spotify to let the users share short music clips.
Tango’s CEO Uri Raz and Co-founder Eric Setton have been in talks with the Alibaba since last October but have been able to strike the deal only after the intervention of Jerry Yang, Yahoo’s Co-founder who incidentally also has a 24% stake at Alibaba and is an old friend of Alibaba’s Executive Chairman, Billionaire Jack Ma.
“Alibaba very much likes what Tango wants to do, and Tango felt Alibaba could be a good investor,” Yang said “Tango as a messaging platform is enabling a lot of commerce and content. That is clearly, I think, an area of interest to Alibaba”.