Alibaba Group Holding said on Thursday that it is planning to spin off its cloud intelligence group within a year while seeking external financing for multiple business units, as part of its largest ever reorganization.
According to Daniel Zhang Yong, chairman and CEO of Alibaba Group, the cloud business, one of the company's most significant growth engines, will be listed in 12 months. In the first quarter ending March 31, the cloud revenue fell 2% from the same period last year, accounting for 9% of the group's total revenue
The Cloud Intelligence Group will be fully spun off and distributed to shareholders as a stock dividend, according to Alibaba’s board of directors.
Prior to the spin-off, Alibaba intends to use private funding to bring outside strategic investors into the Cloud Intelligence Group before it becomes a stand-alone, publicly traded company.
According to Zhang, Alibaba chose the Cloud Intelligence Group as an early IPO contender because its business model, client profile, and stage of development are fundamentally different from those of the other consumer-focused firms in the Alibaba ecosystem.
In addition, Alibaba expects the Cainiao IPO to be completed in 12 to 18 months. Customers of the Taobao & Tmall Group, AIDC, and third parties who are consumers and merchants are served by Cainiao's supply chain, logistics, and delivery services. 67% of Cainiao's equity is owned by Alibaba. Strategic investors in the logistics sector and international institutional investors are some of the company's other stockholders.
Freshippo, also known as Hema, is expected to complete its IPO within the next six to twelve months.