Alibaba leads $280M investment in messaging service Tango

The next episode of messaging services' hot streak, app Tango gets a $280 million investment led by Chinese e-commerce giant Alibaba and surpasses its 200 millionth registered user.

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Joan E. Solsman
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Tango cofounders Chief Executive Uri Raz and Chief Technology Officer Eric Setton Tango

Following Facebook's $19 billion deal to acquire messaging service WhatsApp, rival messaging app Tango announced a $280 million round of funding Wednesday led by Chinese e-commerce giant Alibaba Group, as the company also surpassed its 200 millionth user.

Tango netted $215 million from Alibaba with the additional $65 million from some of its prior investors. Tango's prior investors include Access Industries, Draper Fisher Jurvetson, Qualcomm Ventures, Toms Capital, Translink Capital, as well as Bill Tai, Shimon Weintraub, Jerry Yang, Alex Zubillaga and others.

The Alibaba investment secured the Chinese company a minority stake in Tango and a seat on the start-up's board. Tango wouldn't disclose a valuation of the company based on the latest investment.

The company also said its number of registered users has doubled to 200 million in the last year, and monthly active users have reached 70 million.

Tango co-founder and Chief Technology Officer Eric Setton told CNET that the latest round of funding is Tango's largest by far. Previously, it had raised $87 million.

"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.

"People are starting to see what is the role of these mobile messaging services, not only connecting people but helping them discover media and services," he said. "That is a massive opportunity."

He said Tango would be using the money to hire talented people, especially in engineering; to bring more content to the platform, such as exclusives with popular musicians; and to pursue international growth.

The company's primary growth focus has been in the US, where about 25 percent of its users reside, but the influx of capital means it will be able to present internationally in a more deliberate way, he said. Tango also has a large presence in the Middle East and in parts of Asia like Thailand, Taiwan, Hong Kong, and Singapore.

As for Alibaba's participation, Setton called it a privilege to work with a company of its status and that its insight into Asian markets would be valuable.

Earlier this week, Alibaba confirmed plans to go public in the US, an IPO expected to be the largest ever in the US by a Chinese company by raising as much as $15 billion.