On Our Radar: Deals we are paying attention to for their impact on industry.

Qutoutiao Inc., a Chinese mobile content aggregator, landed a $117 million loan, fully convertible, from the international conglomerate Alibaba on March 29. The loan will net Alibaba some 4% ownership in Qutoutiao.

Details of the convertible loan agreement are available in Qutoutiao’s Securities and Exchange Commission filing.

Qutoutiao, founded in Shanghai in 2016 by Eric Tan, shot up to unicorn status and established itself as China’s second most popular mobile content aggregator.

Alibaba’s loan will boost the fortunes of Qutoutiao, which have recently been shaky. In September, a downsized IPO valued the company at $1.7 billion, when it began trading on the NASDAQ under the symbol QTT. After an initial spike to $15 per American Depository Share, the QTT share price plummeted below the $7 IPO price and was stuck there until January.

Alibaba’s investment, which took place at a $15-per-share price, is among recent positive signs for Qutoutiao. It is on track for more funding soon. On March 29, one day after announcing Alibaba’s investment, Qutoutiao introduced plans for a follow-on public offering of 8.5 million American Depository Shares that could raise up to $24.8 million.

Qutoutiao is expected to use its new funds to seek continued market growth through content improvements, marketing and potentially through acquisitions. Qutoutiao was reported to have a daily active user (DAU) penetration rate of 4.16% last summer, implying that 4.16% of daily active internet users in China are active on Qutoutiao each day. While more than 4% is impressive, Jinri Toutiao, the most popular Chinese content aggregator, has a DAU penetration rate of over 20%. Qutoutiao has sought to boost its market share by offering cash rewards for user engagement and focusing on smaller cities, where content platform penetration is lower.

Alibaba’s investment in Qutoutiao is all the more surprising given that Qutoutiao has collaborated with Alibaba rival Tencent since Tencent’s March 2018 strategic investment in Qutoutiao. The two Chinese internet giants — Alibaba and Tencent — have cooperated with each other more lately. The two along with Suning, a Chinese appliance maker, and three Chinese government-owned auto manufacturers, recently co-invested in T3, a new ride-sharing venture.

Tencent and Alibaba’s interest in Qutoutiao may be explained by their desire to join forces to combat a nascent rival: ByteDance, the internet machine-learning company that owns the news platform Jinri Toutiao in addition to TikTok, a short video-sharing platform that recently gained impressive market share in the United States.