Alibaba Leads $280M Fundraising for TangoME

NEW YORK (The Deal) -- The frenzied pace of messaging deals continues, with TangoME Inc.'s $280 million fundraising from Alibaba Group Holding Ltd. and others on Thursday, March 20.

The Mountain View, Calif., messaging app's pool of 200 million registered users has doubled in a year. Of those, 70 million are active on a monthly basis.

The latest round reportedly puts Tango's valuation at $1.1 billion.

SNL Kagan analyst Seth Shafer observed in an e-mail that the deal could focus attention on Canadian messaging outfit Kik Interactive Inc. "as options are dwindling for anyone wanting to buy their way into the mobile messaging space."

Facebook's (FB) $19 billion purchase of WhatsApp Inc. reinforced the outsized valuation expectations for messaging companies with fast-growing user bases.

Japanese Internet retailer Rakuten Inc. said in February that it would buy Viber for $900 million.

SNL's Shafer noted that a $1.1 billion valuation for Tango would come to about $15.71 per monthly active user. The price is a discount to the $42.22 per monthly active user that Facebook paid for WhatsApp, but marks a premium to the $8.18 per monthly active user that Viber cost Rakuten.

Kik, which has backing from RRE Ventures, Spark Capital and Union Square Ventures, says on its website that it has 100 million users but does not cite monthly active users.

Tango developed a music sharing service with Spotify Ltd., and has made its platform available to game developers and advertisers opening paths to generate revenues from the free video and voice calling and texting services.

If you liked this article you might like

Why Amazon's Reported Smart Glasses Might Be Just a Niche Product -- For Now

Why Apple Pay Cash Won't Be a Venmo Killer: PayPal CEO

Dow, S&P 500 Set New Records as Fed Moves to Unwind Balance Sheet

PayPal Has Billions in Cash and Is On the Prowl for Acquisitions

PayPal Hunting for a Big Deal?