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Mobile Messaging Apps: A Market Review

Posted on Tuesday, Apr 1st 2014

The recent $19 billion acquisition of mobile messaging app WhatsApp by Facebook has brought unprecedented attention to the market. According to consulting firm Ovum, global revenues of mobile SMS plans fell from $145 billion in 2012 to $120 billion in 2013, primarily due to the shift toward data-driven communication applications. Add to that the growing adoption of smartphones, and this trend is likely to continue. Here, we review the top ones that are making waves in the market: Tango, WeChat, LINE App, Kakao Talk, and Kik Interactive.

Tango’s Offerings
Mountain View-based Tango is another player in the market which is aspiring to become an all-in-one social networking app for consumers. Tango goes beyond traditional mobile messaging apps by enabling users to make free phone and video calls, play games using its app, and send free text and multi-media messages.

Tango was founded in 2009 by current CEO and serial entrepreneur Uri Raz and Eric Setton. The company was born because both founders wanted to come up with an inexpensive way to communicate with their families overseas. They were looking for a video calling option that did not restrict them to access the call through a desktop. The service is based on advanced peer-to-peer and video compression technologies that allow it to scale to hundreds of millions of users with low infrastructure costs while delivering high quality video. Tango began as a competitor for FaceTime, which in those days was available only on a Wi-Fi network for iPhones. Tango went beyond that service and evolved significantly by enabling users to communicate across multiple platforms and over 3G networks.

Today, Tango has more than 200 million registered members across 224 countries and is available on iPhone, iPad, Android phones and tablets, Blackberry, Kindle Fire, and even the PC in over 39 different languages. Besides communication, Tango also offers a mobile gaming platform. They have developed games and also opened their platform to third party developers who wish to access the mobile gaming community without relying on the user’s Facebook account. Their gaming content has grown 40% over the last year and has also helped them earn revenues as gaming partners share revenue back with them from in-app purchases on the platform.

Tango’s Financials
Tango’s apps are free to download and the company earns revenues through ad sales and in-app purchases. Their in-app store sells upgrades such as stickers, animations, decorations, and video messaging service. Tango’s ad-platform, launched last December, also claims to have better click-through rates than industry averages. Being a private company, Tango does not disclose its revenues or earnings details.

Tango is venture funded and has raised over $367 million from investors including Hambrecht Ventures, Draper Fisher Jurvetson (DFJ), Len Blavatnik, Alex Zubillaga, Translink Capital, Qualcomm Ventures, Access BridgeGap Ventures, and Alibaba. Their latest round of funding was held last month when they raised $280 million in a round led by Alibaba. The funding has helped peg Tango’s valuation at $2 billion-$3 billion. Tango plans to use these funds to expand their staff in US and China as it works to grow their presence in America and Asia.

Tango wants to distinguish itself from traditional mobile messaging apps like WhatsApp and wants to be known more as a social networking app than as a mobile messaging app. As this infographic published by Techcrunch reveals, Facebook Messenger and WhatsApp were the clear leaders in most international markets by a good lead. Facebook’s acquisition of WhatsApp consolidated that lead. But with more than 200 million members, multiple monetization abilities and among the best video messaging services, Tango still has something interesting to offer.

This segment is a part in the series : Mobile Messaging Apps

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