Tango Raises $40 Million to Vie With Skype in Video Calling

Courtesy Tango

Tango's video calling service has grown to 45 million users since launching in 2010.

Tango, a startup that offers mobile video calling, has raised $40 million from investors including Qualcomm Ventures and Access Industries, the company said today in a release.

The service, which lets users make video calls across Apple, Android and Windows Mobile phones, has grown to 45 million users since launching in 2010.

Even though the company has yet to spend all of the $42 million it raised last July, it wanted to take more cash now because new investors offered funding at an attractive valuation, Chief Technology Officer Eric Setton said in an interview.

“There’s a lot of interest right now around mobile companies that do well,” said Setton, who co-founded the company with fellow video technology veteran Uri Raz. “Unlike most companies in our space, we actually generate revenue.”

Setton said Facebook’s $1 billion purchase of Instagram earlier this month helped raise investor interest.

Tango has raised a total of about $100 million from investors including Draper Fisher Jurvetson, Michael Birch, Andy Bechtolsheim and Bill Hambrecht.

The company would not disclose its valuation, which was previously at $160 million when it took funding last year, two people said at the time. Setton also would not specify how much the startup has made by selling extra storage for video messages and animations that play on the screen during calls.

When Tango began offering its app for Microsoft’s Windows Mobile phones last year, it became the first video calling service to span all three major mobile platforms. It’s still the only mobile video service to do so.

Microsoft, which bought Skype for $8.5 billion last year, has not developed that video service for use on its own mobile operating system.

Update: Corrects amount of funding raised and when it occurred last year.

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