Goldman Sachs and Singapore investment company Temasek Holdings have invested $110m into China online book company Cloudary.
In a statement, Cloudary said that the proceeds raised will primarily be used to further enhance its incentive scheme for writers, secure literary content, develop and market its mobile Internet products and applications, upgrade the technology and operational infrastructure, as well as contemplating strategic investments and acquisitions for both vertical and horizontal expansion across the entertainment content value chain.
Xiaoqiang Hou, chief executive officer of Cloudary, said: “With the additional, highly value-added resources and strategic partners we obtained from these fundraising and strategic collaborative activities, Cloudary is now even better positioned to respond to the increasingly competitive landscape of online literature industry.”
The company, which was part of Shanda Group ten years ago, is expected to see business grow rapidly in the next couple of years on the back of the e-book industry taking off in China. Amazon has reportedly launched its e-book Kindle device in China recently. Amazon launched Chinese versions of its Kindle apps for iOS and Android last year, as well as a localized Kindle electronic bookstore, according to a report by tech trade site, thenextweb.com.
Bloomberg reported that the investment by Goldman Sachs and Temasek took place at a 25% lower valuation than in a previous funding round, and the private placement values Cloudary at about $600m, which is less than an earlier valuation of $800m.
The report noted that Cloudary had filed for an IPO in the US more than two years ago, but its share sale has yet to kick off.