PE investors set for partial exits from China's JD.com
Tiger Global Management, DST Advisors, Hillhouse Capital Management and Capital Today will make partial exits from JD.com as the Chinese e-commerce firm seeks to raise as much as $1.69 billion through a US IPO.
The online retailer is planning to sell 93.7 million American Depositary Shares priced at $16-18 apiece, according to a regulatory filing. The offering comprises about 69 million in new shares, with the rest sold by existing stockholders.
Tiger Global will sell 13.35 million shares, reducing its stake from 18.1% to 15.8% once the dilution effect of the newly issued shares is also considered. DST's stake will drop from 9.2% to 8%, while Capital Today's holding falls from 7.8% to 6.8%. Two investment vehicles managed by Hillhouse Capital Management will see their combined interest fall from 13% to 11.3%.
The filing comes after JD.com's rival, Alibaba Group, filed for an US IPO last week that is expected to raise more than $15 billion.
While Alibaba runs an online marketplace providing merchants to sell goods to customers, JD.com adopts a different business strategy that it acts as a direct seller of goods, which are held in its self-supported warehouses and relied on its own delivery services.
Formerly known as 360buy or Jindong.com, JD.com has received more than 1.7 billion in venture capital and private equity funding in the last three years.
The company raised $400 million through a Series F round of funding led by Kingdom Holding, an investment company controlled by Prince Alwaleed bin Talal, a Saudi Arabian billionaire, in February 2013.
The commitment came barely three months after Ontario Teachers' Pension Plan and Tiger Global invested $400 million and nearly two years after DST Advisors and led a consortium that put in $1 billion.
Capital Today, Luminary Capital, Bull Capital Partners, Sequoia Capital and Insight Venture Partners are among the early investors.
It also raised capital from stategic investor Tencent Holdings ahead of its IPO, receiving $214.7 million for a 15% stake. Tencent agreed to subscribe 351 million ordinary shares issued by JD.com, as well as subscribing to an additional 5% of the IPO.
The company claims to be second-largest B2C e-commerce company in China after Alibaba, with an 18.3% market share based on transaction volume in 2013.
Founded in 2004, JD.com posted RMB69.3 billion ($11.5 billion) in revenue at the end of 2013, up from RMB41.4 billion during the same period in 2012. It reported a net loss of RMB1.3 billion last year, compared to net loss of RMB1.7 billion in 2012.
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