Chinese tech giant Alibaba had previously mentioned its intention to raise at least $1 billion for Lazada, its e-commerce platform in Southeast Asia, but has since rolled back its off. Bloomberg reported on Wednesday that the deal was called off since negotiations with potential investors became bogged down over the platform’s valuation.
Fundraising efforts could resume if conditions change, people familiar with the matter said, though representatives for Alibaba and Lazada declined to comment.
At present, as the domestic market matures day by day, Alibaba is seeking greater growth in overseas markets. The company has three major divisions in other parts of the world: Lazada in Southeast Asia, Trendyol in Turkey, and Daraz around South Asia, have evolved into important units of the company.
In December last year, Alibaba had set a target for gross merchandise volume (GMV) of $100 billion for Lazada. The move is meant to offset the slowdown in domestic business growth by accelerating overseas expansion. But Alibaba intends to spin off Lazada as a separate company as competition intensifies from rivals such as Southeast Asian company Sea’s e-commerce arm Shopee and Indonesia’s GoTo. According to people familiar with the matter, Alibaba had aimed to secure financing for Lazada as a precursor to a spinoff of the Singapore-based company and a potential initial public offering.
By contrast, GoTo’s business scope covers online car-hailing, financial services and e-commerce. In November last year, it completed financing of $1.3 billion before its IPO. Investors included Google, Tencent, Temasek, Abu Dhabi Investment Authority and others.