Saudi prince leads $400 million investment in 360Buy

Kingdom Holding, chaired by Saudi Arabia’s Prince Alwaleed bin Talal, is leading a consortium in the acquisition of a $400 million strategic stake in 360Buy Jingdong, China’s biggest online business-to-consumer retailer after Alibaba’s Tmall.

The size of the stake was not disclosed when the Saudi group announced the deal on Friday, but 360Buy was reportedly valued at around $7.25 billion when it last raised financing in November — a $400 million round of funding led by the Ontario Teachers’ Retirement Fund.

After 360Buy announced strong sales growth during 2012, this latest round of financing may value the company slightly higher. Kingdom Group invested $125 million, or roughly a third of the consortium’s total investment.

“Our deal solidifies the strategic relationship between Saudi Arabia and China,” said Prince Alwaleed in a statement. “The acquisition is also an extension of the initiative of the Custodian of the Two Holy Mosques to support the business alliance between Saudi Arabia and the People’s Republic of China.”

360Buy has long been the subject of rumours about a possible initial public offering, even though it has consistently failed to book a profit.

Richard Liu, the company’s founder and chief executive, said at the retailer’s annual meeting in January that sales during 2012 exceeded Rmb60 billion ($9.6 billion), more than double the 2011 figure, and that he expected the company to be profitable by the end of this year.

Ahmed Halawani, head of private equity and international investments at Kingdom Holding, said that the groups’ investment strategy focuses on “high-growth companies potentially seeking to be listed in one of the international capital markets within three years”.

Prince Alwaleed invested $300 million in Twitter in 2011 and also has stakes in Apple, Citi, News Corp and Time Warner, as well as Disneyland Hong Kong.

QInvest, a Qatari investment bank, advised Kingdom Holding on the acquisition.

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