China’s 360Buy Raises $700M Ahead Of Potential IPO, Wants To Become Stronger Alibaba Rival

360Buy, the quick-delivery shopping site once described as the Chinese mashup of Amazon and Fresh Direct, announced $700 million USD in funding on Friday. While this gives the company, China’s second largest e-tailer after Alibaba, enough cash to delay its much-anticipated IPO, one of its investors, Kingdom Holding Company, a Saudi Arabia firm, focuses on companies that will make a public¬†offering within three years.

In a release, Kingdom’s executive director Ahmed Halawani said the deal is “in line with Kingdom Holding’s private equity investment strategy through selecting high growth companies potentially seeking to be listed in one of the international capital markets within three years.”

Beijing-based 360Buy’s CEO Richard Liu wrote in a companywide email that the funds will be used to continue strategic investments. According to First Financial Daily(link via Google Translate), this funding round increases 360Buy’s valuation by about 20 percent to $7.25 billion USD from $6 billion USD. 360Buy has focused on building its coffers recently-just three months ago it raised $400 million in funding. In his staff email, Liu said the company’s current cash flow following this round of funding is 15 billion yuan.

Despite the size of the latest round, Liu brushed off its significance in his company email. “Financing is not technology, there’s nothing to celebrate,” he wrote, adding that 360Buy’s main focus is still profit. But the money can help 360Buy become a stronger rival to Alibaba. 360Buy will use the cash to make strategic investments, including in IT, its cloud-computing network and, importantly, logistics.¬†Last month the Alibaba Group announced that it and its partners will spend 100 billion yuan ($16.08 billion USD) in the first phase of investment to build a countrywide logistics network. Over the next decade, Alibaba plans to complete a network that will allow the delivery of products across China within 24 hours, supporting annual online sales of 10 trillion yuan.

Investors are also eagerly awaiting the first public offering of Alibaba, China’s largest e-commerce company. Rumors of an IPO were fueled after founder Jack Ma announced in January that he will step down as CEO on May 10. His announcement came after a management restructuring and the June delisting of a Hong Kong unit.

In addition to Kingdom Holding Company, 360Buy’s investors in its latest round of fundraising includes the Ontario Teachers’ Pension Plan, one of Canada’s largest institutional investors, which invested about $300 million USD, a 4.1% stake in the company. Kingdom Holding Company invested $400 million, or a 5.6 percent stake. After this round of financing, 360Buy’s management stake of 9.7% will be reduced.

Earlier investors in the company include Capitol Today, Bull Capital, Pak-to Leung, Digital Sky Technologies (DST) and Tiger Fund.