Demystifying the Alibaba mafia

In his 2018 address to “Class 102,” the Alibaba alumni association, Alibaba founder and then chairperson Jack Ma expressed his hope that two out of five “good companies” in China would be led by his former employees.

Three years on, ex-Alibaba staff of all stripes continue to realize his vision. As Alibaba’s sprawling tech empire expands into new domains, it’s not a surprise to witness the growing influence of its mafia network in China.

Today, some of the country’s leading companies, like New York Stock Exchange-listed ecommerce firm Mogu Inc. and Tesla competitor XPeng Motors, are helmed by Alibaba alumni.

A mafia of ten thousand li

Technically speaking, the Alibaba mafia is made up of ex-employees from the group’s subsidiaries and acquired firms, as well as graduates of Alibaba’s entrepreneurship and business programs, such as the Alibaba Business School.

See also: The growing Lazada mafia

If we limit our analysis to just former full-time employees of Alibaba subsidiaries like Alipay and Taobao, the mafia network could still be in the range of thousands.

To simplify this, our analysis accounts for only 100 of these startups. With the exception of founding members, most entries on this network have been picked randomly from LinkedIn.

Nearly every six out of 10 alumni startups in our sample were founded after 2016, with 2019 seeing the highest number of alumni firms launched.

According to Tech Buzz China founder Ma Rui, this may be due to two reasons: the lockup period for Alibaba stock had expired at that point, and a surge in Chinese VC funding between 2014 to 2015 made raising money easier.

However, this momentum was lost in 2020, likely driven by the fallout of the Covid-19 pandemic and the sharp decline in venture capital funding in China during the first half of 2020.

Just 4,000 VC deals were inked in China last year – half of 2019’s figure – and total funding had also plummeted 66% year on year.

The Chinese government’s ongoing tech crackdown and worsening relations with the US have also added to the woes of Alibaba employees-turned-entrepreneurs.

Juniors lead the way

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A double-edged sword?