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Alibaba Buys Israeli Start-up Visualead

The Chinese ecommerce giant’s first Israeli acquisition will form the basis of its Israel R&D lab, sources inform “Globes.”

Source: Globes

Chinese ecommerce giant Alibaba Group is acquiring its first-ever Israeli startup. Alibaba is buying Herzliya based startup Visualead for $30-50 million, sources close to the deal have informed “Globes.”

Visualead will be integrated into Alibaba’s DAMO academy global software program in which $15 billion is being invested over the next three years. Alibaba announced the project at the beginning of October, saying that it would set up seven R&D labs worldwide over the next three years in Tel Aviv, Beijing, Hangzhou, San Mateo, Bellevue, Moscow, and Singapore. Visualead is expected to form the basis for the Tel Aviv center.

Alibaba invested $5 million in Visualead, which has developed a QR Code solution, back in January 2015, making it the Chinese ecommerce company’s first investment in an Israeli startup. Previously Visualead had raised $2.4 million in a seed round from Kaedan Capital and Entree Capital.

According to sources close to the deal, Alibaba’s main motivation in acquiring Visualead is its global preparations for developments in Virtual Reality (VR) and Augmented Reality (AR), which it anticipates will become particularly important in the ecommerce sector. Visualead recently developed a new Augmented Reality product that lets those marketing online put products they are selling on a video and make it into a 3D interactive component of sites. The aim behind the development is to improve the consumer online buying experience.

Within two years, Visualead will enable Alibaba to offer users a broader Virtual Reality experience, including the use of 3D spectacles in order to move around the website, just as shoppers do in a real mall, and even to measure up clothes and shoes from home.