Alibaba’s plans to file for an initial public offering has Wall Street investors cheering. But the company’s foray into the U.S. stock market could also be a boon for Silicon Valley.

Alibaba is expected to raise as much as $20 billion in its debut, which would make it one of the biggest tech IPOs in history, surpassing Facebook’s record of $16 billion in 2012. The additional cash would give the firm more resources to shore up its presence in the American tech industry, analysts say.

In recent years, the Chinese e-commerce giant has used its massive fortune to invest in several Bay Area startups, including ShopRunner, a subscription service similar to Amazon Prime, and Lyft, a ride-sharing service featuring cars with pink mustaches that competes with Uber.

Alibaba, which controls about 80 percent of China’s e-commerce market, is in no hurry to compete directly with Amazon and other online retailers in the United States, industry observers say. But its investments in the tech space are part of a long-term expansion strategy, they say.

Should Alibaba decide to enter the U.S. market tomorrow, it would face several challenges, analysts say. The company’s experience is limited to emerging markets like China, where it dominates the online shopping landscape.

“As a foreign company, it’s hard for them to understand the U.S. market,” said Yan Anthea Zhang, a professor at Rice University’s Jesse H. Jones Graduate School of Business. “Alibaba cannot simply duplicate its business models here.”

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Instead, the retailer is using its investments to learn about the U.S. market and experiment with different kinds of businesses, she said.

That’s also why, unlike its acquisition spree in China, Alibaba has been content to buy small stakes in U.S. startups.

Ahead of its IPO, Alibaba bought controlling stakes in several Chinese companies including AutoNavi, an online navigation company, and Intime Retail, a Chinese department store.

But in the United States, Alibaba is one of several backers for smaller specialty e-commerce sites, such as 1stdibs.com, a website for antiques and luxury items.

There’s another advantage that investing in Silicon Valley holds for the retailer: a quick inroad into new technology.

Alibaba wants to invest in innovation, said Reena Aggarwal, a professor of finance at Georgetown University’s McDonough School of Business.

“Many of the innovative companies that fit well with Alibaba’s model of e-commerce are based in the U.S.,” she said. “They’re just going after the best technology.”

Alibaba is estimated to be worth $150 billion to $200 billion, bigger than either Amazon or eBay, but behind Apple, Google and Microsoft. The company has a range of businesses — including an online payment service, a money-market fund and a cloud-computing operation.


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