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

TECH SHOWCASE

Rising Market Value

Rising Market Value

Facebook goes express to mega-cap status  Full Article 

Right to be Forgotten

Right to be Forgotten

Google under fire from regulators over response to EU privacy ruling.  Full Article 

Record Smartphone Sales

Record Sales

LG Electronics flags further mobile improvement after Q2 profit jump.  Full Article 

Smartwatch

Smartwatch

Swatch Group denies working with Apple on smartwatch.  Full Article 

Strong Results

Strong Results

Nokia's fortunes brighten on heavy network spending.  Full Article 

Battle of Giants

Battle of Giants

In China, Apple's focus pays off while Samsung feels squeeze.  Full Article 

Anonymity Services

Anonymity Services

Flaws could expose users of privacy-protecting software, researchers say.  Full Article 

Biggest Chipmaker

Biggest Chipmaker

China regulator determines Qualcomm has monopoly - state-run newspaper.  Full Article 

Reuters India Mobile

Reuters India Mobile

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