Alibaba buys majority stake in VC-backed AdChina

Financial terms were not disclosed.

AdChina will operate independently after the acquisition, but it will work closely with Alimama and Aliyun, Alibaba's marketing and cloud computing units, respectively, to develop digital advertising business, according to a statement posted on AdChina's official Weibo microblog.

"The rapid development of the e-commerce industry has made the relationship between e-commerce and marketing even closer. AdChina's data marketing platform is a complementary to Alimama's current marketing business," said Hua Wang, general manager of Alimama, the biggest open-marketing platform in China.

The next 3-5 years will be critical in building a digital marketing platform to help merchants on Alibaba's e-commerce platforms build brands and increase sales, Wang added.

Founded in 2007, Shanghai-based AdChina provides an internet advertising platform that helps advertisers promote their brands across different advertising formats and mobile devices.

AVCJ Research records show that AdChina received three rounds of funding from GSR Ventures, News Corp and Richmond Global Management between 2008-2010. The firm filed for an US IPO in February 2012 but pulled the plan a year after because of adverse market conditions.

Alan Yan, founder and CEO of AdChina told Tencent QQ News that the firm had not abandoned its long-term ambition of a public market listing.

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