China startup dodges IPO ban, floats on shopping website

SHANGHAI Mon Feb 4, 2013 3:27pm IST

Related Topics

SHANGHAI (Reuters) - Chinese entrepreneur Zhu Jiang didn't need a stock market to raise cash for his media startup. Impatient to tap investors even though Beijing has frozen new share sales, Zhu started flogging stock on shopping website Taobao.com.

Before Taobao's owner Alibaba Group ALIAM.UL shut down his virtual store on Monday, saying the platform wasn't allowed to host share offerings, Zhu had pulled in a total of 1.2 million yuan from more than 1,000 online punters.

"For start-ups, time is life," Zhu, founder of Beijing-based video content producer Makev, said on his official microblog on Sunday. "We cannot afford to wait in a long queue for funding approvals, and there's little chance to get bank lending. So this is the practical solution."

In October, China's securities regulator suspended initial public offerings, an effort to help stabilise the country's volatile stock market. The stoppage is likely to last until the end of March.

Thousands of types of consumer goods, cars and real estate are up for sale on Taobao, but it "does not allow the listing of (shares) on the platform and ... has taken immediate action to remove such listings from the website", an Alibaba spokeswoman said in an e-mailed statement.

Lu Fang, a spokeswoman for Makev, said the cash raised from online shoppers has already met the firm's fundraising target. Before it was shut down, Makev's virtual Taobao store was selling vouchers representing 100 Makev shares for 120 yuan.

Taobao is China's largest e-commerce platform with nearly 500 million registered users and more than 800 million product listings at any given time. It is unlisted on any share market.

(Editing by Daniel Magnowski)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Wipro Results

People walk in the Wipro campus in Bangalore June 23, 2009. REUTERS/Punit Paranjpe/Files

Wipro sees rosier end to year as U.S. clients spend

India's third-biggest software services firm Wipro Ltd , under pressure to improve lacklustre sales growth, said it saw a rosier end to the year as more confident U.S. clients increase spending.  Full Article 

Reuters Showcase

New Email Service

New Email Service

Google launches new email service dubbed "Inbox".  Full Article 

Apple-1 Auction

Apple-1 Auction

Early Apple computer sells for $905,000 at auction.  Full Article 

No More Nokia

No More Nokia

Microsoft looks set to drop Nokia name from smartphones.  Full Article 

User Data Security

User Data Security

Apple CEO discusses security with top Chinese official amid hacking claims - Xinhua.  Full Article 

Patent Wars

Patent Wars

Big Tech winning battle with 'patent trolls'.  Full Article 

Record Season

Record Season

FedEx expects record peak volume of 22.6 million packages on Dec. 15.  Full Article 

Yahoo Earnings

Yahoo Earnings

Yahoo ekes out Q3 revenue gain despite display ad weakness.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage