Alibaba Group Holding Ltd has made a 215-million-dollar investment in TangoMe Inc. This step is considered quite beneficial for the companys access to the mobile-messaging competition and comes at a moment when Alibaba is preparing for an initial public offering in the U.S. as soon as April 2014. This is the companys largest investment into a U.S. start-up.
The initial public offering of Alibaba Group Holding is planned for later in 2014. The company is said to be aimed at raising more than the $16.1 billion, which Facebook managed to acquire in 2012.
According to people familiar with the situation, who asked not to be named because the information is not public yet, Alibaba Group Holding Ltd estimates TangoMe Inc. to between 1 to 2 billion dollars. TangoMe Inc. has become a real-time messaging service that provides the opportunity for texting and photo sharing. It has about 200 million registered users and is currently one of the well-known applications that are used for making free calls, such as Skype of Microsoft Corp. and Apple Inc.s FaceTime.
Analysts consider the deal between the two companies as a great opportunity for Alibaba Group Holding to consolidate its presence on the mobile phones market and expand its reach on territories outside China.
The co-founder of TangoMe Inc. – Mr. Eric Setton commented for Bloomberg: “It’s an incredibly competitive market, and a new era for these kinds of transactions and financing levels. Alibaba was very understanding that we wanted to keep leading the company.”
Mr. Setton also said, cited by the Financial Times: “I imagine and I hope that there will be a number of initiatives that we can launch together. In the case of Tango, it’s clear that they realise there is an opportunity in mobile messaging, and everybody is interested in the US market in general.”
Alibaba has been focused on making capital investments in fields such as social media, mapping and e-commerce, which are considered as milestone aspects of the mobile technologies market, in an attempt to attract more users to its online marketplaces called Taobao and Tmall. The company acquired an 18% stake in Weibo and a 28% stake in AutoNavi Holdings Ltd in 2013.
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