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Fab, the gay social network turned ecommerce-design service with 14-million registered members, is now worth over US$1-billion after it received US$150 million in Series D funding. One of the investors involved in the round was none other than Tencent, China’s largest listed Internet company whose services include social networks, ecommerce and web portals.
Fab’s impressive valuation has almost doubled since its last round of funding a year ago, but the company remains unprofitable, according to The Wall Street Journal. This indicates that Tencent’s interest in the American startup could be just as much about directly selling Fab products through its own services, as it could be about learning new global ecommerce models, such as ‘social commerce’ — where social (media) interactions assist in the buying and selling of products and services. For Fab, the deal marks access to China’s market.
Tencent’s primary service, WeChat, is the most likely place this model will be applied. The mobile messaging service is soon to introduce payments to its 195-million monthly active users, reports The Next Web.
It’s quite possible Fab products will simply be sold directly through the WeChat service. China currently has the world’s largest number of Internet and smartphone users, and the world’s largest population. This gives Fab access to potentially the largest consumer-market as it increases over the coming years thanks to rapid urbanisation.
This is not Fab’s first furore into emerging markets, indicating its global strategy. It received funding from Times Internet in December 2012 to expand its footprint into India.
The US$150 million funding is set to keep Fab the fastest growing ecommerce site in the world, and with new-found access to China, there’s no telling how far the ecommerce giant can go.