China 360buy's fundraising drive highlights IPO urgency

Tue Feb 19, 2013 1:57am EST
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By Melanie Lee

SHANGHAI (Reuters) - Chinese online shopping firm 360buy loses money, needs huge cash injections to feed its supply chain, and its profitable rival Alibaba Group has more than double its market share.

That leaves it with one option - float before Taobao does.

Analysts believe a frenetic fundraising drive which has pulled in more than $2 billion in 18 months shows it is getting ready to do exactly that.

Its latest round, which it announced on Monday, raised $700 million counts Saudi Arabia's Prince Al-Waleed bin Talal, Ontario Teachers' Pension Fund and the Tiger Fund amongst investors.

"360buy has to IPO within the next 6-12 months. It is a momentum issue and that's to say they have to try to get out before Taobao IPOs and sucks all the oxygen out of the room," said Michael Clendenin, managing director of RedTech Advisors.

360buy declined to comment on IPO plans and valuation.

The Ontario fund said the latest round of fundraising valued 360buy at around $8 billion.

Alibaba Group, which owns Taobao Marketplace and Taobao Mall, also declined to comment on its IPO plans. However, in a stock buyback deal with Yahoo Inc signed last year, Yahoo offered Alibaba incentives if it lists by the end of 2015.   Continued...

An employee serves a guest at the reception counter inside the headquarters office of Alibaba (China) Technology Co. Ltd on the outskirts of Hangzhou, Zhejiang province May 21, 2012. REUTERS/Steven Shi