A woman standsnext to a door inside the headquarters of Alibaba in Hangzhou, Zhejiang province, April 23, 2014. [Photo/Agencies]

Kabam Inc, a producer of games for mobile devices, received a $120 million investment from Alibaba Group Holding Ltd as part of a plan to distribute titles including Lord of the Rings in China.

The money will be used to finance growth, and an executive from Alibaba will join Kabam's board, according to a statement on Thursday from the San Francisco-based company, which is now valued at more than $1 billion. Other details of the investment were not disclosed.

The accord gives Kabam a tie with China's largest e-commerce company. Kabam had 2013 sales of more than $360 million, double the previous year. Alibaba is preparing for an initial public offering in the United States that may value its business at $154 billion, according to the average estimate of five analysts surveyed by Bloomberg.

"Asia represents 50 percent of the worldwide revenue for games," Kent Wakeford, Kabam's chief operating officer, said in a telephone interview. "The Alibaba partnership gives Kabam a structural advantage in the world's largest gaming market. That's a huge advantage for us."

Lord of the Rings, the first Kabam game offered by Alibaba in China, will be available on mobile applications including Mobile Taobao and Laiwang, the company said.

Alibaba joins a roster of Kabam investors that includes Google Ventures, Warner Bros, Intel Corp, Canaan Partners, Redpoint Ventures and Pinnacle Ventures, Kabam said.

Kabam has made six acquisitions over the past 18 months, including the purchase of a Vancouver-based company with rights to the Fast and Furious brand, Wakeford said.

The Alibaba investment will allow the company to make further acquisitions in Asia, he said.

"We see the opportunity to really accelerate that growth through M&A," Wakeford said.

Many technology startups have boosted their valuations this year to more than $1 billion, with some reaching the 11-digit mark and starting talk of a bubble. According to researcher CB Insights, 14 US-based technology companies entered the $1 billion club in the first half of the year, more than double the number of startups that did so in all of 2013.

Alibaba has been deepening its investment in US startups. Last year, the company started a US-based fund to invest in e-commerce and emerging technologies, led by Michael Zeisser, who previously led Liberty Media Corp's Internet strategy. Alibaba's investments include the ride-sharing application Lyft Inc and messaging app TangoMe Inc.

Alibaba also had discussions to invest in the Los Angeles-based messaging startup Snapchat Inc at a valuation of more than $10 billion, Bloomberg News reported on July 30. Snapchat makes a mobile app that people use to send messages and photos that disappear shortly after they're opened.

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