B2B firm gets millions after private placement
One of China's biggest business-to-business (B2B) Internet companies has raised US$82 million in a new round of private placement, helping it grow as an industry leader globally and fend off challengers
One of China's biggest business-to-business (B2B) Internet companies has raised US$82 million in a new round of private placement, helping it grow as an industry leader globally and fend off challengers . Jack Ma, chairman and chief executive officer of Alibaba.com, said on February 17 that the company had concluded a recent placement from Japanese company Softbank Corp, Singapore's Venture TDF, US funded Fidelity, Granite Global Ventures and a new investor. He declined to say how much each contributed to the placement, but said the shareholder structure of the company has not changed a great deal, with the management and employees of Alibaba remaining as the biggest stakeholders.
"This placement is a very important step in our strategy," Ma said.
With affluent capital at hand, the Hangzhou-based Internet company is capable of spending more resources on fostering the e-commerce market in China. Ma said the first chunk of the capital will be used to improve its TrustPass programme, which aims to verify the creditability of Chinese companies. Alibaba has attracted more than 30,000 TrustPass users since 2002, who each pay 2,300 yuan (US$278) per year.
Ma said his company will also put more effort into e-commerce technologies and marketing.
The Chinese B2B firm spent US$37 million on building an e-commerce software development centre in Hangzhou. In November, it released its instant messaging tool, Alitalk, to help business clients talk over the Internet. Alibaba will also unveil its search engine in March, which will enable customers to find their business partners and products on the Chinese company's website."A war in China's e-commerce market is imminent, so we must shore up ammunitions for that," Ma said. According to Alibaba's founder, the company now has much more than US$100 million in cash-at-hand, which will help it to fend off threats form home and abroad.
Ma said Alibaba more than tripled its revenues in 2003, to about 360 million yuan (US$43.48 million), and had a positive cash flow of more than 100 million yuan (US$12 million). It is aiming to generate a positive cash flow of 1 million yuan (US$120,000) every day in 2004 and pay 1 million yuan in taxes for each day of 2005.
