Alibaba and PE capital invest in Youku Tudou ahead of IPO
Print Edition
ALIBABA Group and a private equity firm are investing US$1.22 billion in the online video sector ahead of China’s largest e-commerce company’s highly anticipated initial public offering in the United States.
The investment by Alibaba and Yunfeng Capital, a China-based PE firm co-founded by Alibaba Executive Chairman Jack Ma and other Internet entrepreneurs, will allow them to acquire 18.5 percent in US-listed online video website Youku Tudou Inc.
Alibaba will own 16.5 percent, and Yunfeng Capital will hold 2 percent of the total number of Youku Tudou’s outstanding shares at US$1.69 per share, according to a joint statement yesterday.
“This is an important strategic initiative that will further extend the Alibaba ecosystem and bring new products and services to Alibaba’s customers,” Ma said in the statement.
Alibaba CEO Jonathan Lu will join Youku Tudou’s board of directors after the completion of the transaction, which is subject to regulatory approval.
Lu Zhenwang, an independent e-commerce consultant and commentator, said the investment “is the fastest and easiest way for Alibaba to get a foothold in the online video sector and a crucial way to generate more revenue in the mobile Internet sector in the future.”
Alibaba’s investment in Youku Tudou follows a string of moves ahead of its US listing as the e-commerce giant extends its influence in all other Internet sectors as well as offline such as retail.
It’s also accelerating to expand its mobile payment service to prevent its market share being eroded by rival Tencent’s popular WeChat app, which offers smartphone instant messaging as well as mobile payment.
Earlier this month, Alibaba said it will invest HK$5.37 billion (US$692 million) in Hong Kong-listed Intime Retail (Group) Co to expand into the online-to-offline (O2O) business.
Last month, Alibaba said it will pay HK$6.2 billion for 60 percent of Hong Kong-listed ChinaVision Media Group.
Youku Tudou has about 17.9 million monthly active desktop webpage viewers in February, higher than the 13.5 million of Sohu, said Internet research firm Analysys International.
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