Alibaba steps up with mobile messaging firm Tango in US$215m deal
US$215m deal is likely to take the e-commerce giant's rivalry with Tencent beyond China
E-commerce giant Alibaba could be dancing all the way to its initial public offering in New York after acquiring a stake in US mobile messaging application provider Tango for US$215 million.
The deal marks a likely escalation of the competition between Alibaba and Tencent, Asia's largest internet company. Their rivalry is now poised to spill outside the mainland as the two firms back competing mobile messaging apps that are seeking to attract users around the world.
Tango, which provides free video messaging, text chats and voice calls, has 200 million registered users worldwide. The combined user base of Tencent's WeChat messaging app and its mainland counterpart Weixin reached 355 million last year.
Alibaba's new acquisition is part of the more than 20 billion yuan (HK$25 billion) in strategic investments made by the company since founder Jack Ma Yun stepped down as chief executive last year.
Ricky Lai, a research analyst at Guotai Junan International, said the investment in Tango would enable Alibaba "to integrate its e-commerce business into a competitive, feature-rich mobile messaging platform".
Alibaba led all investors in the Series D funding round of Tango, which raised US$280 million, the US firm said on Wednesday. Tango has generated a combined US$367 million in four financing rounds since it was launched in September 2009.