Reports: Alibaba making large investment in Kynetic LLC's ShopRunner
Tom Paine
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Chinese ecommerce giant Alibaba is reportedly set to make a major investment in ShopRunner, said to be in the $70 to $75 million range, for a minority stake in the two-day shipping service, according to both the Financial Times and Wall Street Journal. There has been no confirmation from either company.
ShopRunner is a part of Michael Rubin's Conshohocken-based Kynetic LLC, and was spun off along with Fanatics Inc. and Rue La La from GSI Commerce when eBay acquired that company in 2011, although eBay maintained a stake in ShopRunner and Rue La La. ShopRunner is an alternative to Amazon Prime for other retailers. Although some of its client roster is shown here, little information has been released on its financial performance or number of subscribers.
Alibaba also recently invested in another Kynetic company, Fanatics Inc., in a round which valued the sports apparel retailer at $3.1 billion.
Ironically, the deal would reconnect ShopRunner CEO Scott Thompson indirectly to Yahoo, since that company owns about 25% of Alibaba. Thompson was forced out as Yahoo CEO due to a resume discrepancy in 2012. Alibaba is in the process of preparing for an IPO.
ShopRunner in the past called Conshohocken its headquarters, but its website now says it has a "seasoned team based in San Francisco, Philadelphia and New York," and the Wall Street Journal says it is based in San Mateo. A look at ShopRunner's LinkedIn page suggests that a majority of its employees are based in the Philadelphia area, although most of the senior management team is in the Bay area.
A little more background on the deal from All Things D.
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A look at Philly area publicly traded tech companies: How big are they?
Tom Paine
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Earlier this year, Comcast (NASDAQ: CMCSA) and SAP AG (NYSE: SAP), which of course is headquartered in Germany but has its base for the Americas in Newtown Square, were running neck and neck in terms of market capitalization (the total value of their outstanding shares).
Now, however, Comcast has opened up a substantial lead, with a market cap of $117 billion reflecting completion of the acquisition of the other half of NBC Universal, a positive outlook by many analysts on its performance, and acquisition talk among other cable firms that has had the effect of lifting share prices for the industry as a whole.
To put Comcast's market cap into perspective, Apple's exceeds $400 billion, Google's is nearly $300 billion, and Microsoft's about $270 billion. Comcast is also carrying almost $50 billion in debt, which is included in what is referred to as enterprise value.
SAP AG's market cap is about $89 billion, a bit down from its highs earlier in the year as recent results have lagged expectations somewhat. That compares to Oracle's $155 billion and IBM's $206 billion.
Other than that, there aren't many monsters among publicly traded tech companies based in the area. Having not looked at it in a while, I was surprised to see that Ametek's ( NYSE: AME ) market cap had climbed in the past year to $11.1 billion. The Berwyn-based electronic instrument and electromechanical device maker follows a strategy of building positions in certain niche markets and strengthening those positions through what are usually small to midsized acquisitions.
Notable emerging publicly traded tech companies in the region include Radnor-based BI vendor QlikTech (NASDAQ: QLIK - $2.9 billion) and Newtown-based Eastern Europe-focused systems integrator EPAM Systems (NYSE: EPAM), whose market cap has soared to $1.4 billion, eclipsing that of old-line Unisys (NYSE: UIS - $1.1 billion).
Ewing, NJ-based Universal Display (NASDAQ: OLED - about $1.5 billion) is one of the more interesting area tech firms to watch, with its very strong technology portfolio in the emerging OLED market, but its stock has been subject to wild fluctuations based on every rumor about what companies such as Apple and Samsung may or may not do.
Of course, in the Philadelphia area these publicly traded companies really don't tell the story of the tech scene as much as they might in Silicon Valley. One must look beyond them to divisions of companies based elsewhere such as Lockheed, Siemens, Quality Systems (NextGen Healthcare), Liberty Interactive (QVC), and Arris (Motorola Home) as well as locally based privately owned firms including Bentley Systems, SunGard Data Systems, Vertex and Analytical Graphics. And there is an army of tech companies, both large and small, serving the healthcare and life sciences markets. Also, the startup scene, both more mature ventures and the many earlier stage startups getting off the ground, provides much of the innovation and energy in the area.
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