Alibaba Group company set to pay $535 million for Zhejiang Rongxin
Acompany controlled by AlibabaGroupHolding LtdChairman Jack Ma will pay 3.3 billion yuan ($535 million) to become the largest shareholder of financial software companyHundsun Technologies Inc.
Zhejiang Rongxin, 99.1 percent controlled by Ma, purchased all of Hundsun Technologies Group, which owns a 20.6 percent stake of the listed Hundsun Technologies Inc, according to a filing with the Shanghai Stock Exchange. Shares of Hangzhou-based Hundsun have been suspended since March 17.
Alibaba is investing in US and Chinese companies before an initial public offering in New York as early as this month. China’s largest e-commerce company said on Wednesday it put money into a $250million fundingroundfor the ride-sharing application developer Lyft Inc, and last month it led a $280 million investment in TangoMe Inc, a messaging application.
“It is clear that investing and finance are high on his agenda,” Mark Tanner, managing director at China Skinny, a Shanghai-based research and marketing agency, said of Ma. “Both the IP and data he will obtain from the acquisition of Hundsun Technologies will further enhance his analysis for finance and credit.”
Hundsun, founded by eight engineers in 1995, works with clients in government and in the finance, transportationand education industries, according to its website. Its businesses include software to facilitate online payments, which Alibaba handles through its affiliate Alipay, and to help business-toconsumer websites, which would include Alibaba’s Tmall.com.
Florence Shih, a spokeswomanfor Alibaba, declined tocomment on Ma’s investment. Alipay also has an Internet financing business called Yu’ebao that has drawn depositsfrom81 million customers as they chase returns higher than those offered by China’s banks.
Last month, Alibaba said it would invest about $692 million in Intime Retail Group Co Ltd, an owner of department stores and supermarkets, as China’s biggest e-commerce operator integrates online and offline shopping. The two companies will form a venture in China, using shopping malls, department stores and supermarkets to develop an onlineto-offline business. Alibaba competes with Tencent HoldingsLtdfortheattention ofChina’s 618 million Internet users.
In October, Alibaba led a $206 million investment in ShopRunner Inc, a subscription service similar to Amazon. Inc’s Prime plan that offers two-day shipping from major US retailers, as well as a $50 million investment in Quixey Inc, a search engine for mobile apps.
The deals come as Alibaba prepares for an IPO that may value the company at as much as $200 billion as it capitalizes on China’s position as an economic superpower.