Alibaba Group Buys Stake In U.S. Shopping Site
Expected To Be Worth About $75 Million
Chinese e-commerce company Alibaba Group has reportedly purchased a minority stake in U.S. firm ShopRunner, a retail shipping service run by former Yahoo chief executive Scott Thompson. The deal, which is part of a string of recent investments made by Alibaba, is expected to be worth about $75 million. In June, Alibaba invested in Fanatics Inc., which like ShopRunner is owned by Kynetic LLC, as part of a $170 million funding round that valued the sports apparel retailer at $3.1 billion.
The investment in ShopRunner, which provides free two-day shipping services for retailers and competes directly with the Amazon Prime service, is expected to provide new insights and offerings for customers of Alibaba’s TaoBao and Alibaba.com divisions. The deal comes as the Asian e-commerce giant is preparing an initial public offering (IPO), reportedly to take place on the Hong Kong Stock Exchange before the end of the year. Analysts expect Alibaba’s IPO to value the company at about $70 billion, making it one of the world’s largest Internet IPOs.
However, Alibaba Group is trying to identify a structure that would allow Jack Ma, who is a member of Counselor’s Power 50, and his management team to maintain control of the company following the IPO. Alibaba, which operates websites where merchants can sell items (including promotional products) directly to consumers worldwide, had its Alibaba.com division listed publicly on the Hong King Exchange until the company took it private last year.