Alibaba : first acquisition in Israel- Visualead


Chinese e-commerce giant enters accord to purchase maker of designer QR codes in deal worth tens of millions of dollars

Chinese e-commerce giant Alibaba Group Holding Ltd. has entered an agreement to buy Herzliya-based Visualead Ltd., a developer of an online platform to create visual codes and mobile campaigns, Calcalist reported, citing people familiar with the matter. The deal is worth tens of millions of dollars, one of the people said.

Alibaba had already invested in Visualead in 2015, in its first foray into the Israeli market. If the deal is completed, this would be Alibaba’s first acquisition in Israel, Calcalist said.

The Chinese giant also invested in Israeli startups Twiggle, Infinity Augmented Reality, Lumus and ThetaRay. In March 2015 it partnered with Israeli venture capital firm JVP (Jerusalem Venture Partners) to invest in a range of companies.

Visualead’s technology turns any image, logo, profile picture, animation, or even video into designer QR (Quick Response) code, and helps increase consumer interaction with brands, according to information compiled by Start-up Nation Central, an NGO which tracks Israel’s startup industry.

A Visualead QR code for Red Ribbon Week (Courtesy)

The company provides scan-based connectivity solutions for product packaging and anti-counterfeiting, mobile payments, mobile coupons, social networking, mobile ticketing, login, and authentication.

QR codes are indecipherable images for mobile devices that are used as “shortcuts” to reach websites. Using special scanner software, mobile users aim their device’s camera at the QR code, which, when it is interpreted by the scanner, opens up an associated web page with more information or an opportunity to buy online.

Founded in March 2012 by CEO Nevo Alva and CTO Itamar Friedman, the startup has raised $8.35 million to date from investors including Israeli private equity firm Kaedan Capital and Entrée Capital, as well as Alibaba, according to Start-up Nation Central. Visualead opened up a headquarters in Shanghai in 2013, with Alibaba becoming one of its biggest customers and using Visualead QR codes in its Alipay online payment system.

Last month, Alibaba said it was launching an ambitious global researchproject that will see $15 billion in R&D investment over the next three years. The initiative includes the creation of seven research laboratories worldwide, including one in Tel Aviv.

A sample Visualead QR code (Photo credit: Courtesy)

At bilateral meetings this March in Beijing, Prime Minister Benjamin Netanyahu touted Israel as a “perfect junior partner” to China’s economy, and officials agreed to accelerate the establishment of a free trade zone between the two countries.

Alibaba, the world’s biggest online merchant, has expressed an interest in Israeli cybersecurity, financial technology, mobile connectivity and apps and video, an industry source said in March 2015.

Visualead did not immediately reply to an email seeking comment on the acquisition.


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