Shanghai-based Chinese video game company Giant Interactive Group is selling its stake in Alibaba Group Holdings to New York-based investment firm Tiger Global Management LLC for around US$199 million, according to a company announcement.
The transaction values Alibaba at around US$130 billion, according to media reports.
Giant Interactive committed US$50 million to a special investment vehicle that acquired Alibaba shares in September 2011.
At that time, U.S. private equity firm Silver Lake Partners, DST Global, Yunfeng Capital and Temasek Holdings acquired around US$1.6 billion Alibaba shares from Alibaba employees for a stake of under 5%.
That investment was arranged through the special investment vehicle, and valued Alibaba at US$32 billion. In around two-and-half years, Alibaba’s valuation has increased more than four times.
Alibaba is currently planning an IPO in the U.S. or Hong Kong to raise as much as US$15 billion this year or next.
According to a securities filing, Tiger Global also owns 22.1% of JD.com. As the second largest e-commerce company in China, JD.com filed for an IPO in the U.S. in January, hoping to raise US$1.5 billion.
Founded in 2001, New York-based Tiger Global operates private equity and hedge fund investments with US$2.75 billion under management.
Yunfeng Capital was co-founded by Alibaba’s founder Jack Ma. Giant Interactive’s chairman Shi Yuzhu is also a co-founder of the fund.
DST Global is an investment firm founded by Russian businessman Yuri Milner.