The next billion dollar company: Tango raises $280M
IM and video app Tango obtains funding from Alibaba that values the company at more than a billion dollars
After the purchase of WhatsApp by Facebook for $19 billion and the acquisition of Viber by Rakuten for $900 million , another IM app is making headlines – Tango, announced its completion of raising $280 million. The current funding round is led by electronic commerce giant Alibaba. Other previous Tango investors also participated, including Access Industries, Draper Fisher Jurvetson, Qualcomm Ventures, Toms Capital, Translink Capital and private investors including Shimon Weintraub, Jerry Yang, Alex Zubillaga and others.
According to reports, in this round Alibaba invested at least $ 215 million for about 20-25 percent of the company, valuing the company at more than a billion dollars. So far, the company has raised $87 million in its previous financing rounds. In September 2010 it raised $5 million; in July 2011, $42 million and in April 2012, $38.1 million. The current round of funding puts the total funds raised by the company to date at approximately $365 million.
No more standard IM app
Tango is an instant messaging app that allows users to make video calls for free. Tango’s model is slightly different from all other IM applications, because it is a real social network and game system, which is basically the revenue model of the company. Aside from the news feed, the application shows you the latest activity of your friends at Tango and provides a variety of mini games that you can play in real time with your friends.
Tango’s business model does not only rely on the banner and sponsored content in the app. The top of the chat tab, for example, had a banner for “recommended,” and users can purchase “surprises” packages for $ 1.99 for their friends. A few months ago, the company announced its collaboration with the music streaming service Spotify, so users can upgrade their instant messaging with songs that come from the catalog of Spotify.
Particularly popular among Arabic speakers and the Far East
“Tango showed tremendous growth because of its unique approach and combination of free communication, social, and content,” said Joe Chai, vice chairman of Alibaba Group. “We were very impressed with the quality of vision and the team at Tango and we believe they have the most innovative way to look at the market opportunity in Mobile IM.”
Tango was founded in 2009 by Israeli Uri Raz and American Eric Setton, and is located in Silicon Valley. “We are excited to bring Alibaba as a strategic investor,” said Raz in a press release. “Alibaba’s investment is a clear indication of the future potential joint content and services, and how they will be transferred to consumers in the end.”
A review of the application shows its great popularity especially among Arabic speakers in Israel. According to the latest figures presented by the company, the total number of users stands at 200 million, of which 70 million are active users each month. Other than in the Middle East, Tango is extremely popular in various countries in the Far East, such as Thailand, Taiwan, Hong Kong and Singapore.There is no doubt that with the new investment Tango is now a legitimate competitor among different chat services competing for the Asian audience, such as LINE, WeChat and KakaoTalk.