With Skype Threatening, Tango Raises Another $8.7M


Things are heating up in the mobile video chat market, as multiple players are looking to develop applications for making calls between smartphones and other devices. With that in mind, video chat startup Tango.me has raised an additional $8.7 million in funding, according to an SEC filing.

Tango launched last September at our Mobilize conference with a plan to make video calling easy. The startup enables users on iOS (s AAPL) and Android (s GOOG) mobile devices to chat with one another, regardless of whether those users are on 3G or Wi-Fi networks.

Since Tango’s launch, the mobile video chat market has become white-hot, with companies like Skype, Yahoo, (s YHOO) ooVoo and others enabling video calling in their own mobile apps. Yahoo Instant Messenger’s mobile video calling functionality became available in October, and startup ooVoo launched its multi-user video chat application in mid-December.

But the biggest threat for startups like Tango is Skype, which has more than 600 million users worldwide and regularly tops out at about 25 million simultaneous users during peak chat times. The voice and video over IP firm introduced mobile video chat on iOS devices in late-December and is aggressively hiring mobile developers to extend its video chat offerings to other devices. Skype also recently switched to the H.264 video codec to enable video calling between mobile devices and Internet-connected TVs from partners like Samsung and Panasonic.

With all the activity going on around it, Tango is investing heavily in building out its technology. The latest round brings total funding to $13.7 million, following an early $5 million raised from individual investors such as Bill Hambrecht, Michael Birch, Bill Tai, and Daniel Scheinman. Those investors have returned, along with some new undisclosed investors.

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