China-based e-commerce giant Alibaba Group discussed raising at least $1 billion for its Southeast Asian arm Lazada before calling off negotiations with potential investors when talks bogged down over Lazada’s valuation, Bloomberg reported on Wednesday, quoting people familiar with the matter.

Alibaba had aimed to secure financing for Lazada as a precursor of a spin-off of the Singapore-based firm and a potential initial public offering (IPO), the people reportedly said.

It was reported that Alibaba had hoped to secure at least $1 billion but backed off after failing to secure its envisioned valuation, the people added.

According to the people, Alibaba has mothballed the fundraising for now as it does not need funds and markets remain volatile, given the shrinking valuations of tech firms from New York to Hong Kong. Chinese tech stocks share prices dropped to new low after speculation grew that regulators could increase scrutiny of the industry.

For instances, shares of Chinese life services app Meituan have fallen more than 15 percent since Feb 18 after Chinese authorities issued a new guideline that requires goods delivery platforms to cut fees for restaurants, Technode reported on Monday.

Alibaba remains intent on eventually spinning off Lazada as a separate company, the people reportedly said, as competition heats up with fast-moving rivals like Sea Ltd’s Shopee and Indonesia’s GoTo.

Last year, US-listed Sea raised about $6 billion in a sale of US shares and convertible bonds. GoTo is also raising capital, according to earlier reports. The fundraising attempt could resume if conditions change, the people added. Representatives of Alibaba and Lazada declined to comment, according to Bloomberg’s report.