It looks like Chinese ecommerce giant Alibaba Group Holding Ltd have begun flexing their muscles even before their upcoming initial public offering. According to an article in the New York Times, Alibaba has been very active in investing in up and coming mobile and ecommerce firms this year.
Alibaba Group is planning an IPO in September that most analysts project will value the e-Tailer at north of $200 billion.
Alibaba Group acquisition spree
The Alibaba Group already controls nearly half of the Chinese ecommerce market, so international expansion makes perfect sense.
The NYT article points out that Alibaba made a $215 million investment in Tango, a messaging app, back in March. Moreover, it was revealed earlier this week that the company contacted Snapchat, who turned down a $3 billion acquisition offer from Facebook, about making a large investment valuing the messaging firm at nearly $10 billion.
Alibaba also participated in a $170 million financing for Fanatics, an online sports memorabilia retailer, earlier this year. Just yesterday, Kabam, a video game startup, announced that it has received a $120 million cash inflow from Alibaba, and that the Chinese firm has been awarded a seat on the Kabam BoD to oversee its investment.
Alibaba strategy
Analysts also point out that Alibaba’s recent investments might be about more than just diversification. They point out that working with connected Silicon Valley financiers might give the firm a leg up in figuring out the next big smartphone app or e-commerce trend.
“With investments like these, they get good products, they make a splash, and most importantly, they build connections and trust amongst the venture capitalists,” commented Sameet Sinha, an Internet analyst with B. Riley & Co.
A spokesperson for Alibaba refused to comment on the investments, though the Chinese company has outlined its investing principles in IPO documents. In the regulatory filings, Alibaba indicated it plans to add more users, develop how they use its services and improve customers relations.
Exactly how investments as different as sports memorabilia and messaging apps fit into Alibaba Group’s future plans remains a bit murky, but it is clear that Alibaba is making investments in North America one of its top priorities.
