In a strategically significant deal, Chinese giants Alibaba has backed New York-based startup PlaceIQ by investing an undisclosed amount of money in the company. This comes after PlaceIQ announced that it had raised $25 million in a round of funding earlier this year.

Talking to tech website Techcrunch, the CEO and Co-founder of PlaceIQ, Duncan McCall  said," I don't want to speak for [Alibaba], but in my mind, they didn't want to invest in a company - they wanted to find a strategic partner."

PlaceIQ studies consumer behavior, by combining location data with "first party" marketers, helping companies fully understand their consumers.

The technology not only tells whether a consumer went to a store, it is also capable of knowing what ads they watch and what news channel they prefer for their daily news.

Alibaba is looking to use this technology to significantly improve its ad placements, and position them in a manner that will be the most beneficial.

"Location now becomes less about sales and marketing and more real technology making decisions and business insight where that becomes much more important," McCall said. "For us, our core value is in the data and technology. When we want to get into a new geography, let's find the market leader and deploy with them."