Mobile Commerce

Alibaba Invests Big in Israeli QR Code Startup

Chinese e-commerce giant Alibaba has added to its global list of investments by reportedly injecting capital into Israeli QR code developer Visualead.

Though both companies haven’t commented on the amount, sources said to be close to Alibaba told The Wall Street Journal that the infusion was less than $10 million. Currently, the deal is for Visualead to use the funds to work on the next wave of QR technology, while Alibaba will use the patents and technology from the startup across its business holdings, especially e-commerce.

Visualead is a young startup that specializes in offline to online marketing between customers and brick-and-mortar establishments. Its main product has been developing QR codes that disguise themselves into products for better integration, as well as using colors and animations to make them more interesting. Only three years in since raising the initial $750,000 of startup capital, its clients include BMW, Orange, and Coca-Cola. With the potential multi-million dollar deal from Alibaba, Visualead will gain a foothold in the thriving Chinese QR market, as well as the capital to develop the next generation of QR codes.

With the Alibaba partnership, Visualead will also be able to develop the new technology with the demands of the world’s largest QR market in mind, and a partner that has used QR codes very effectively in the past. QR codes are popular with Chinese social media networks and advertising as a time-saving way of communicating without having to write out Chinese characters. Most personal and business social media accounts have QR codes attached to them, so having a good QR reader is a necessity in the country. Alibaba’s extensive familiarity with QR codes goes back to when it was using them to link Chinese newspapers, as well as using these codes for in-store mobile payments on its e-commerce sites since 2011. Though Alibaba’s scan technology service Mashingtao, Visualead will work on QR developments for Taobao and Tmall.com, two of Alibaba’s e-commerce platforms — which given Alibaba’s ability to integrate QR into sales and advertising, that could be beneficial for the startup.

While $10 million may not seem like a large investment from China’s largest e-commerce company, for Visualead, it’s an important capital infusion for research and development. For Alibaba, the company could reap the benefits of it in its mobile commerce ventures and ability to stay on top in QR technology.

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