China-based e-commerce group Alibaba made some major waves in the Indian startup scene today when it announced that it will be acquiring a substantial majority stake in Chennai-based Orbgen Technologies Private Limited for a whopping 120 crore.

Having offices in Chennai and Hyderabad, Orbgen is famous for its online-ticketing website, TicketNew, which was established ten years ago in 2007 by Ramkumar Nammalvar.

The acquisition is said to have taken place through Alibaba's flagship entertainment arm,
Alibaba Pictures Group Limited. The deal signifies the company's first major purchase outside China's burgeoning internet ticketing market.

According to sources close to Orbgen, the path for Alibaba was paved in the company through a combination of dilution of stake by promoters led by Mr. Nammalvar and others, and issue of fresh equity at an premium, which hasn't been disclosed.

Orbgen Technologies topline came in the financial year 2015-16 at Rs. 18 crores, and the company has been earning profits since half a decade now. After the acquisition is officially done, the Chinese e-commerce giant will get to have four nominees on Orbgen Technologies' board. The promoters will have just two representatives for themselves.

Since 2007, this was the Chennai-based firm's first fundraising activity. Mr. Nammalvar is hopeful that the funding would open more avenues for Orbgen, which already has presence in more than 300 cities in India. He's also hoping that the capital flow will be able to provide some amount of return on capital investment for the promoters.

With Alibaba on board, Mr. Nammalvar believes that TicketNew could emerge as a potential competitor of BookMyShow, which is currently the sole big winner of the ticking space in India. In addition to this, India still has a huge untapped online ticketing market that needs urgent focus. According to statistics available, movie-ticketing market in India is estimated to be somewhere around $2.2 billion to $2.5 billion, but online ticketing makes up for only 10-15 per cent of this huge market.

According to Mr. Nammalvar, when compared to China's 40,000 screens, India's per-screen ratio is negligible. However, he is now hopeful that with Alibaba on its side, he will soon be able to take TicketNew pan India.

According to the press release, “Given Alibaba Pictures’ operational knowhow and financial resources, the partnership can potentially help strengthen the leadership and market share of TicketNew in the e-commerce ticketing space and enable the company to capitalize on the burgeoning consumer market in India."

If we look at Alibaba Pictures movement in the last few years, one would realise that the Los Angeles-based company has expanded its businesses beyond the Chinese market. With an eye on increasing foothold in Asia-Pacific region, the firm believes that the partnership will be mutually beneficial for both, Alibaba Pictures and TicketNew.

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