Alibaba Group Holding Ltd., China’s largest e-commerce company that has recently made news for its planned IPO and investment in e-commerce platforms, mobile apps, Chinese television firms, and even department stores, has now entered the film investment business with its new crowdfunding platform, Yu Le Bao, according to The Hollywood Reporter.
Translating as “entertainment treasure,” Yu Le Bao will allow investments of between 100 yuan ($16.13) and 1,000 yuan ($161.30) into films as well as video games.
Each investor individually is allowed to choose a maximum of two investment plans from the list of projects, and each investor will receive a 7 percent interest rate on their investment. The first round of funding, which began on March 31st, was limited to US$11.77 million (73 million yuan) in total. That limit was reached within five days, ending at 5:00pm on April 4th. The second round of funding will begin in May.
Between March 31st and April 4th, 223,800 investors bought 785,500 shares in the available movie projects. A social networking game starring Chinese actress Fan Bingbing was the first project to reach its funding limit. The most popular project was the Tiny Times series, which attracted 100,000 investors. Sun Zhou’s Impossible and Wolf Totem, directed by Jean-Jacques Annaud, were also big earners.
Despite Yu Le Bao’s early success, there are worries about a lack of transparency in the spending of funds and the possibility of the People’s Bank of China putting caps on the investments. Though crowdfunding is illegal in China, Alibaba has been careful to differentiate Yu Le Bao from traditional crowdfunding platforms by saying that the investment is indirect and that investors are earning capital gains on wealth management products.
image source: chris