China-based internet company Alibaba has contributed $215m to a $280m venture capital round raised by US-based mobile messaging service Tango.
The additional $65m was provided by existing investors. Forbes has reported that the round valued Tango at about $1.1 billion, and that Alibaba acquired a stake sized between 20% and 25%.
Tango has raised $87m in funding from backers including the corporate venturing units for wireless communication provider Qualcomm and industrial group Access Industries, venture capital firms Draper Fisher Jurvteson and Translink Capital, and investment firm TOMS Capital.
Founded in California in 2009, Tango provides a free mobile communication service that encompasses video, voice calling and texting, and which works across 3G, 4G, and Wi-Fi networks.The company has also introduced a system allowing users to share music from Spotify and play online games, and this has helped it double its registered users year on year to 200 million.
“Tango has exhibited tremendous growth because of its unique approach to combine free communications, social and content,” said Joe Tsai, Alibaba Group’s executive vice chairman. “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.”
Tango will use the money to fund additional staff, and aims to significantly expand its content partnerships as it builds up the platform.
“We are thrilled to bring on Alibaba as a strategic investor,” said Tango chief executive Uri Raz. “Alibaba is a renowned disruptive innovator, and their investment in Tango is a testament to our strategy and a clear indication of the future potential of how content and services will be delivered to consumers.”
The considerable investment is the latest in a series of moves by Alibaba that have lit up corporate venturing over the past fortnight. In addition to news that it plans to raise up to $15bn in a US initial public offering later this year, Alibaba has invested in a $20m round raised by China-based travel and tourism portal ByeCity, and portfolio company Weibo has itself filed for a $500m IPO.