Tango, Chat App Unicorn, Lays Off 9% Of Employees Following Failed Transfer Into E-Commerce
Tango, the cellular messaging unicorn that reached a billion greenback valuation when Alibaba invested $280 million in it early final yr, has laid off round 9 % of its workforce after it shuttered a quick effort at e-commerce.
The Mountain View-based mostly firm launched an in-app commerce function powered by Alibaba and Walmart again in Might of this yr, initially within the U.S. market, however it has confirmed to TechCrunch that ‘Tango Store’ was closed down final month, resulting in the lay-off off round 30 staff engaged on it.
“The initiative didn’t actually pan out,” Tango CTO Eric Setton informed TechCrunch. “We didn’t see the conversations we needed. [There was a] good quantity of visitors however the quantity didn’t materialize. [We recently] up to date the app to take the e-commerce move out, however sadly couldn’t maintain the workforce engaged on that initiative.”
Following the reorganization, Tango now has 270 employees throughout its U.S. workplace and a smaller presence in Beijing, China. Apparently, one excessive-profile exit from that reshuffle was Chi-Chao Chang — previously VP of Tango Labs and the lead on Tango’s commerce initiative — who’s now working at Fb, though he’s concerned with the social community’s search enterprise not Messenger.
Regardless of the retrenchment, Setton claimed Tango is on monitor to have its highest quarter of income so far.
“This yr, [revenue] is an order of magnitude above what we’ve ever seen earlier than,” he stated, though he declined to present a selected income determine.
Setton additionally declined to provide an replace on Tango’s present consumer base. The final determine given by the corporate got here in Might, on the launch of Tango Store, when it claimed 300 million registered customers. That wasn’t an enormous bounce on the 200 million registered customers that it introduced in March 2014, when Alibaba invested and Tango introduced its first (and solely) month-to-month lively consumer rely: 70 million.
The shortage of recent consumer metrics means that Tango’s consumer progress is stalling, notably because the cellular messaging scene matures and community results come into play to drive customers to probably the most established, extra fashionable apps. As a result of, in any case, chat apps are about chatting, which is tough to do if your folks all moved to Snapchat (estimated at one hundred million month-to-month customers), Kik (340 million registered customers), Fb Messenger (seven hundred million month-to-month customers) or WhatsApp (900 million month-to-month customers).
Tango Store allowed customers to seek out and purchase gadgets listed on Walmart or Alibaba’s Aliexpress
I stated again in March that the corporate “confronted an uphill battle” to make Tango Ship work just because different messaging apps are dominating the dialog within the U.S.. Making an attempt to monetize customers once they aren’t notably locked into your app is difficult at greatest.
Then there’s the differing tradition within the U.S.. Sure, in-app commerce is proving to be a hit in China, the place WeChat is the dominant social firm with little competitors, however shoppers within the U.S. are spoilt for selection each when it comes to messaging and social media, in addition to e-commerce platforms themselves.
Setton admitted that, whereas Tango Store didn’t work out as the corporate had hoped, social e-commerce is more likely to work for different gamers, akin to Fb Messenger, and he absolutely expects to see the technique adopted by rivals sooner or later.
So, what now for Tango?
It’s a troublesome one. The corporate is a relative messaging veteran, having initially launched as a cellular video calling service again in 2009. Immediately, it describes itself as combining “communication, social networking, and content material in a single platform” — there are many apps providing the identical package deal and, as I’ve stated earlier than, it isn’t too clear which markets — if any — Tango is the primary participant in, which makes locking customers into the service and monetizing them tough.
Exits for unicorns are one thing that’s nonetheless being found out because the variety of corporations valued at a billion dollars or extra grows. However, Alibaba’s continued obsession over messaging — after lacking the cellular chat race in China — and its ongoing curiosity within the U.S., might give Tango a shot at an exit by way of acquisition. Nevertheless, if income and consumer progress isn’t something to put in writing house about, the Chinese language firm won’t step in for Tango in any case.