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Lango's new messaging app targets smartphones for growth

By Tova Cohen

TEL AVIV (Reuters) - Messaging application developer Lango, which enables users to combine pictures, icons and text, has launched an overhauled platform aimed at the smartphone market, reaching 400,000 active users in its first two weeks.

U.S.-Israeli Lango, formerly called Zlango, competes with apps such as WhatsApp, Skype and Google Hangout. But unlike most of the others, it develops its own content, allows for simple posting to social media and enables sending pictures and icons together with text, rather than as an attachment.

"Users are flooded with new apps and therefore ... want to use less apps that do more," Chief Executive Udi Graff said.

Lango's original product, focused on feature phones, enabled users to send icons based on the content in text messages. As smartphones evolved, Lango refocused its efforts to take advantage of high-speed mobile Internet, developing applications for Apple's iPhone and Android-based phones.

Users send 12 trillion messages annually, with that number expected to triple over the next four years, Graff told Reuters. Revenue is expected to grow to $310 billion in 2016 from $202 billion in 2011.

This expansion has created a fragmented market with no clear leaders, despite the presence of players such as Google (NSQ:GOOG), Facebook (FB.N) and Apple (NSQ:AAPL). These companies believe messaging is crucial for future mobile advertising.

"Corporations want to be on mobile but they don't know how to do it," Graff said. "The difference between mobile and the web is that people on phones don't want intrusive advertising."

Lango enables advertisers to embed branded icons within messages. For example, if a user suggests to someone to meet at a cafe, an icon with the name of a nearby cafe will appear.

The app works both over the Internet like WhatsApp and others or as a regular text message. A feature unique to Lango is an auto-suggestion engine that suggests visuals that best represent typed words.

The company is focusing on the United States, which comprises 75 percent of all messaging traffic, offering U.S.-centric content, said Graff, who formerly headed Hewlett-Packard's subsidiary in Israel.

New icons are loaded daily based on current events, U.S. holidays and sports. Lango offers premium packs of icons for a fee and plans a revenue sharing model on branded images.

New registrations at Lango surpassed 20,000 daily. Graff expects Lango to reach monthly revenue of $500,000 before the end of 2014.

In the past year Lango raised $6 million from venture capital firms Benchmark Capital and DAG to finance the new product. Lango is now seeking to raise another $6 million to fund marketing and expansion.

(Editing by Jeffrey Heller)