UPDATE 1-China’s 360buy raises $1.5 bln, DST invests

* 360buy raises $1.5 bln in latest financing round

* DST, Wal-Mart amongst investors

* China’s e-commerce space heats up, firms eye IPOs

(Adds quotes, background)

By Melanie Lee

SHANGHAI, April 1 (Reuters) – China’s largest
business-to-consumer website 360buy.com said on Friday it has
raised a whopping $1.5 billion from a diverse group of investors
in its latest round of financing, in preparation for an initial
public offering in 2013.

360buy’s latest fundraising comes at a boom time in China’s
e-commerce industry that is set to grow at high double digit
rates over the next two years, as rising incomes across China
boost consumer spending and the number of Internet users soar.

360buy, which sells branded electronics goods online, said
Russian Internet investment group Digital Sky Technologies had
put in $500 million. News of DST’s investment was first reported
by the Financial Times. [ID:nL3E7EU09V]

DST has invested in social networking website Facebook and
discount-buying website Groupon.

“With regard to the rapid development of 360buy and China’s
e-commerce industry, this round of fundraising will have a very
meaningful impact on that,” Liu Qiangdong, chief executive of
360buy, said in a statement.

360buy said that Tiger Fund had also invested in the firm.
In December, 360buy confirmed that it had secured $500 million
in funding from six strategic partners including Wal-Mart Stores
Inc . [ID:nTOE6BN03K]

The company has received $1.1 billion of the funds.

360buy made 11.4 billion yuan ($1.7 billion) in sales in
2010, estimated Beijing-based research firm Analysys
International.

China’s e-commerce industry handled 520 billion yuan ($79
billion) in transactions in 2010, with about 30 percent of the
country’s 450 million strong Internet users transacting over the
Web. Taobao is the leading e-commerce platform in China with
more than 70 percent of the market by transaction value.

“It’s still at a very fast growth stage. With more
investment it is getting more competitive and we are going to
see more development of new business models,” said Hong
Kong-based JPMorgan analyst Dick Wei.

RUSH FOR GOLD

The soaring number of Chinese Internet users coupled with
rising incomes has whet investor appetite for Chinese Internet
companies such as Baidu Inc and Tencent Holdings
.

Shares of recently listed Qihoo 360 Technology
soared in their debut on Thursday, more than doubling its IPO
price of $14.50.

Qihoo’s $176 million IPO comes on the heels of a rush of
similar Chinese Internet companies in the fourth quarter, such
as online video company Youku.com Inc and Internet
retailer E Commerce China Dangdang Inc .

The shares of both companies also soared in their NYSE debuts
in December, rising 161 percent and 87 percent, respectively.
Youku has since risen another 34 percent, while Dangdang erased
some gains to trade 39 percent above the IPO price.
[ID:nNL3E7EE3E]

Wei said the large investment into 360buy could bring
competitive pressure to Dangdang and Taobao. On Thursday, Baidu
said it will shut its online e-commerce store Youa and migrate
users to other platforms. [ID:nL3E7EV1WE]
($1 = 6.549 Chinese Yuan)

(Editing by Jacqueline Wong)

UPDATE 1-China’s 360buy raises $1.5 bln, DST invests