from the January 2015 issue

Alibaba invests in Israeli start-up Visualead

Visualead has developed a QR Code solution, and operates in the Chinese market.

Chinese Internet giant Alibaba has entered the Israeli market: according to reports on foreign websites, Alibaba will invest in Israeli start-up Visualead, which operates in the Chinese market and has developed a QR Code solution.

This is Alibaba's first ever investment in an Israeli company. Before the current investment, Visualead had raised $2.4 million in two fund raising rounds.

Last month, a delegation from Alibaba visited Israel and met Minister of the Economy Naftali Bennett, who made a presentation on the local high-tech market. "Expanding commercial ties with China is a strategic goal for the Ministry of the Economy and the State of Israel. The Chinese market is undergoing rapid growth, and in the past year we have taken several steps to make it easier for Israeli companies, such as Visualead, to enter this market. I am sure that Alibaba will find interesting investment opportunities in Israel and that we shall see many more collaborations between them and Israeli companies," Bennett said.

Confirming the report, Visualead released a statement today as follows: "Visualead, an Israeli O2O (Offline to Online) startup and pioneer of Visual QR Code technology, announced today that it has secured B-round funding from Alibaba Group Holding Limited (NYSE: BABA, "Alibaba Group"). Alibaba Group and Visualead also entered into a strategic cooperation agreement for the use of Visualead's patents and technology across Alibaba Group's ecosystem. Visualead will use the proceeds from the funding to develop next generation of O2O technology.

Alibaba Group seeks Israeli start-up opportunities
"The investment into Visualead is Alibaba Group's first-ever investment in an Israeli company and it is a nod to the country's prolific development as a booming technology startup scene.

"Visualead is working closely with Mashangtao, the scannable code technology service of Alibaba Group, to provide innovative tools and solutions to sellers on Taobao Marketplace and, China's two biggest online shopping platforms. Mashangtao recently utilized Visualead's Visual QR Code technology to enable merchants to generate QR Codes. Visualead and Mashangtao are also engaged in joint projects in the areas of anti-counterfeiting, mobile, and video.

"'We have already seen O2O as a major area of growth in China. Working with Visualead, a dynamic startup and first-mover in this field is the next logical step as we seek to enhance customer engagement on mobile platforms. We believe that Visualead's leading Visual QR Code technology will compliment our mobile marketing initiatives and enhance our ability to take advantage of the booming O2O opportunities in China,' said Zhang Kuo, director of Alibaba Group's Mashangtao technology service.

"Nevo Alva, CEO of Visualead, said ďAlibaba is the ideal strategic partner for distributing our technology in China and the leading O2O company worldwide. We are humbled to have Alibaba as a shareholder and on our Board of Directors, committed to making our Visual QR Code the new worldwide standard for Offline to Online engagement.'

"Through its patented technology and mobile marketing O2O platform, Visualead helps over 500,000 businesses in over 200 countries connect with their customers both Offline and Online through a fun and effective mobile experience. Visualead's computer vision and machine learning technology turns any image, profile picture, animation, and even video into an engaging and effective Visual QR Code, which can be easily scanned by any QR Code reader.

"While the use of QR Codes for mobile marketing is widespread across the globe, QR codes are especially popular in China due to their social network connectivity and app download abilities. Based on Visualead's experience, consumers are up to four times more likely to scan a Visual QR Code than a regular black and white QR Code."

Reprinted from the Israel High-Tech & Investment Report January 2015

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