Alibaba Pictures, the film-focused subsidiary of e-commerce group Alibaba, has paid RMB400m ($56.5m) for a 60% stake in China-based online entertainment provider Tianjin Yinhekuyu, DealStreetAsia has reported.
Yinhekuyu creates short videos, films and web content and has collaborated with another Alibaba subsidiary, online streaming platform Youku, on a live entertainment show called Mars Intelligence Agency.
Youku owns 20% of Yinhekuyu and is retaining its stake, according to Variety, which reports that the company will also collaborate with Alibaba’s ticketing and promotion subsidiary Tao Piao Piao and Alifish, ita licensing and entertainment division.
The corporate will pay RMB277m to buy 28.8% of Yinhekuyu’s shares from three existing shareholders: Chuangshi Xinhe, an investment management vehicle for online education provider Talkweb, private equity fund Hongtai Fund and private equity firm Yunfeng Capital.
The other RMB123m will be used to acquire a 31.2% stake from Yinhekuyu’s founders. Yunfeng Capital was formed by Alibaba co-founder and former chairman Jack Ma.
Alibaba Pictures said in a statement: “By integrating the production business of Tianjin Yinhekuyu in variety shows into the group, it enables the company to build up its own production team for variety shows and have an all-round capacity in the production of movies, drama series and variety shows.”
Youku and Talkweb had contributed to a series A round for the company sized in the eight-figure renminbi range, according to China Money Network. It added $29.4m in a 2016 series B led by Yunfeng Capital and backed by Youku (then Youku Todou) and Hongtai.
