CDH leads round for Alibaba Pictures ticketing business - update

Alibaba Pictures Group said in a filing that the Series A investors will hold a 12.4% stake in Taobao Movie, valuing the business at RMB13.7 billion. Other participants in the round include companies with strategic interests in China's movie industry, such as Hehe Pictures, Bona Film Group and Huace Media.

Taobao Movie was owned by Alibaba until December of last year, when Alibaba Pictures bought the asset. It was one of three acquisitions - which together cost RMB3.1 billion - alongside cinema ticketing systems supplier Yueke Software Engineering and movie crowdfunding platform Yulebao. Alibaba Pictures' internet-based promotion and distribution business generated RMB136.3 million in revenue and RMB21.9 million in profit in 2015 - up from zero in 2014 - with Yueke accounting for the majority on both counts.

Alibaba Pictures said in its 2015 annual report that its M&A efforts are intended to create "an internet-powered integrated platform which spans financing and investment, entertainment content production, promotion and distribution, fan-based economics, and cinema service provision." Last year, the company raised around HK$12.1 billion ($1.56 billion) through a share placement to help finance potential acquisitions.

Alibaba Pictures was created last year when Alibaba Group bought 60% of Hong Kong-listed ChinaVision - in which rival Tencent Holding and VC firm Sequoia Capital were investors - for HK$6.24 billion and renamed it. The company is already involved in content production, developing its own pipeline of domestic movies and TV dramas as well as investing in international projects such as the most recent installment in the Mission: Impossible franchise.

For Alibaba, the movie unit is one of several ways to occupy a larger portion of the media value chain in order to create more points of contact with users and gain a better understanding of consumption patterns. The company's other activities in the space include Tmall Box Office, a subscription service along the lines of Netflix, and the full acquisition of online video platform Youku-Tudou.

There are already several significant players in China's online movie ticketing segment. Last month, Beijing Weiying Times Technology - operator of Weipiao, a ticket-booking platform for movies, sporting and other events - raised RMB3 billion ($462 million) in an extended Series C round of funding at a valuation of $2 billion. The extension brought its total Series C funding to RMB4.5 billion. This followed a merger with rival service Gewara, which was backed by multiple VC investors.

Wanda Cinemas, the country's largest cinema operator, is also active in the space, acquiring a 20% stake in Mtime Holdings, a Chinese online movie ticketing platform backed by several VC investors, in December 2015. The companies has previously agreed to build movie merchandising centers in all of Wanda's top theaters, boosting its penetration of the online-to-offline (O2O) market.

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• Topics
• Greater China
• Media
• Technology
• Expansion
• CDH Investments Management
• Alibaba Group
• TMT
• Growth capital