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Alibaba close to $8 billion funding goal, report says

The company will use the bulk of that cash to pay off Yahoo and get back 20 percent of its equity.

Chinese e-commerce giant Alibaba Group is nearing the close of an investment round designed to reduce Yahoo's equity in its operation, according to a new report.

The company is closing in on its $8 billion investment goal, according to The New York Times, citing sources. The news outlet says the funds are being raised from a host of sources, including hedge funds, mutual funds, and private equity firms. The company will sell preferred and common shares in the transactions, and will borrow about $4 billion, the Times says.

Alibaba and Yahoo entered into an agreement in May that prompted this latest funding round. Under the terms of the deal, Yahoo would cash in 20 percent of its 40 percent stake in Alibaba for about $7 billion. The remaining stake would be sold off in an eventual Alibaba IPO. For now, Alibaba is working on raising the cash to handle the first part of the agreement.

Ross Levinsohn, Yahoo's then-interim CEO, signed off on the deal in May, saying it was the right move for the company and its shareholders. As Alibaba aims to make good on its side of the deal, Yahoo announced yesterday that Levinsohn is leaving Yahoo for other opportunities. The departure is widely viewed as the result of Yahoo's board choosing Marissa Mayer, and not Levinsohn, to take the CEO role at the company.

It's not immediately clear when Alibaba will finish raising its funds. However, the company is expected to repurchase Yahoo's 20 percent stake in the fourth quarter.