​Alibaba sees value in QR code startup Visualead

Alibaba Group is backing Israeli QR code startup Visualead in a round-B funding effort that will see the Chinese e-commerce giant use the company's patents to spice up its offline-to-online marketing palette.

Israeli QR code (quick-response code) technology startup Visualead has secured B-round funding from Chinese e-commerce leviathan Alibaba Group.

While the value of the fundraising effort remains under wraps, Alibaba Group has said that it wants to use Visualead's technology and patents across its ecosystem.

Visualead, founded in 2012, has developed a platform that allows users to generate branded QR codes integrating images and colours into the matrix barcode technology. It claims that over 500,000 businesses, including Intel, HP, and eBay, use its platform.

(Image: Visualead)

Although the seemingly ubiquitous QR code has become somewhat stigmatised since its invention in the mid-'90s, with scanning rates virtually stagnating despite increased smartphone usage, the head of Alibaba Group's merchant QR code-creation platform Mashang Tao suggested that the technology remains popular in China due to its facilitation of that market's "booming" offline-to-online (O2O) sector.

"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," said Mashang Tao director Zhang Kuo. "We believe that Visualead's leading visual QR code technology will complement our mobile marketing initiatives and enhance our ability to take advantage of the booming O2O opportunities in China."

For Visualead, the agreement between the two companies not only represents Alibaba Group's first investment in an Israeli company, but will also allow the Tel Aviv-headquartered company to fund the development of its next-generation O2O technology.

Visualead is currently working with Mashang Tao to provide new tools and solutions to sellers on Alibaba Group's Taobao Marketplace and Tmall.com, two of China's biggest online shopping platforms.

Mashang Tao recently took on Visualead's visual QR code technology to enable its merchants to generate QR codes.

The two companies are also engaged in joint projects in the areas of anti-counterfeiting, mobile, and video.

"Alibaba is the ideal strategic partner for distributing our technology in China and the leading O2O company worldwide," said Visualead CEO Nevo Alva. "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."

Alibaba Group's investment in QR code technology follows moves by the likes of Samsung and Verizon to incorporate QR codes into their online security features.

In August last year, American telco giant Verizon Enterprise moved towards a two-factor authentication option incorporating QR codes in its universal identity service.

Likewise, in June 2013, Samsung Electronics Australia and Bendigo Bank subsidiary Community Telco Australia launched a retail point-of-sale mobile payments solution that utilises QR codes for authentication purposes.