Tango, the mobile messaging app-maker, said Wednesday (US time) that it has raised $280 million in a new funding round led by Chinese e-commerce giant Alibaba Group Holding Ltd.
By almost any measure, the investment amounted to a staggering sum for a mobile app developer. The deal, which came one month after Facebook Inc's stunning $19 billion acquisition of Whatsapp, underscored the lengths that Internet companies are willing to go to gain a foothold in mobile communications.
Alibaba invested $215 million while the remainder of the funding came from Tango's previous investors, which include Access Industries, Draper Fisher Jurvetson and Jerry Yang, a cofounder of Yahoo Inc, Tango said.
The investment gives Alibaba a minority stake in a messaging service with 200 million registered users and 70 million active users.
Alibaba, which views domestic rival Tencent as its most serious competitor, has long recognized the threat posed by Tencent Holding's WeChat, a popular messaging app that has morphed into an e-commerce platform. Alibaba recently introduced a WeChat competitor called Laiwang, but the service has so far struggled.
Tango is the latest in a string of investments for Alibaba, which is preparing for a highly anticipated IPO in New York that could value the company at $200 billion.