The world's largest e-commerce company is set to debut on the New York Stock Exchange with the ticker BABA on Friday in one of the biggest initial public offerings ever. But the Alibaba Group isn't Silicon Valley's latest darling — it hails from the motherland of market socialism: China.

Jack Ma, a plucky, diminutive former English schoolteacher, started the company 15 years ago with $60,000 pooled from among 18 colleagues. His enterprise has ballooned into an internet behemoth that will fetch at least $21.8 billion on Friday, making a big splash in American equity markets with an initial valuation of $168 billion — which many analysts think is conservative.

If Alibaba's underwriters exercise an option to sell more shares (which practically everyone expects them to do), the IPO will be the richest in history.

Less than half of the funds raised will actually go into Alibaba's accounts, however, with the rest a moneymaking bonanza for insiders. The biggest windfall in terms of pure cash goes to Yahoo, which received 40 percent of Alibaba in exchange for $1 billion and control of Yahoo China in 2005. Yahoo already made $7.6 billion when it sold some stock back to Alibaba in 2012. Now it has earned about $8.3 billion from a quarter of its remaining stake, while still retaining 16.3 percent of the internet giant.

Yahoo's experience underscores the massive returns realized by Ma's early investors this week, and reflects the seemingly insatiable demand for Alibaba equity — within two days of Ma's pre-IPO roadshow, he had reportedly received enough private orders to cover the entire deal.

Talk ahead of Friday's offering suggested that the company would boost its scale and price, which was ultimately set at $68 a share on Thursday. Some prognosticators expect that it could spike north of $80 after trading begins.

Jack Ma, executive chairman of the Alibaba Group. (Photo via Flickr)

Ma wouldn't have enjoyed this success without impeccable timing. He first encountered the internet in 1995, when it was practically unknown in his country. When Alibaba began in 1999, the World Bank calculated China's internet penetration rate — a measure of people's ability to access the World Wide Web — at a paltry 0.7 percent. The company has grown in tandem with China's exploding economy, and times have certainly changed.

China had fewer than 300 million internet users in 2008. It has 632 million today, and is on pace to have some 850 million by 2015. Alibaba's revenue growth, meanwhile, has been torrid. Its latest quarterly report in August noted an increase of 46 percent since last year, to $2.54 billion.

'I got Jack drunk in Hong Kong and afterwards asked him if he'd invest.'

Alibaba has been likened to a combination of Amazon and eBay/PayPal, though it's bigger than those two combined. It's actually a company that holds a dizzying array of tech businesses.

The Alibaba Group's most profitable companies operate "pure platforms" — marketplaces or services that exist solely to connect buyers with individual and corporate sellers. There is no inventory and very little marketing expense. Over the years, these websites have adeptly expanded their services to facilitate transactions across their platforms. Today, roughly 80 percent of online shopping in China occurs within the Alibaba ecosystem.

The competitive advantage of Alibaba's unique business model resulted from a defensive reflex. In 2003, eBay entered the Chinese market by acquiring the local online auctions site EachNet, which then had a dominant market share of about 85 percent. Alibaba.com was a simple business-to-business portal for trade, connecting buyers and sellers, importers and exporters. But it was struggling, and Ma risked losing ground to an expanding eBay.

He responded by starting Taobao ("panning for treasure," roughly translated), a completely free consumer auction and commerce site. EachNet never adjusted its listings fee-based approach under eBay, and mishandled a "migration" of Chinese users to eBay's US-based platform. Taobao won 67 percent of the market by the end of 2006, with EachNet's share having dwindled to 29 percent. That year, eBay gave up the fight.

Ma's company, which was nearly bankrupt when eBay entered China, ended up dominating the country's e-commerce. Now he's an informal technology advisor to Chinese President Xi Jinping, whom he befriended while Xi was the Communist Party chief of Zhejiang Province, where Alibaba is based.

The Alibaba Group's three crown jewels drive most of the valuation behind its IPO: Taobao, the online marketplace Tmall, and a PayPal equivalent called AliPay (of which the Group retains only 37.5 percent after spinning it off in 2011).

Taobao remains free to use, but vendors pay to advertise on the site. Tmall charges established businesses deposits for storefronts that cater to Chinese customers, as well as a commission on sales. Alipay handles more than half of China's surging electronic payments. These companies would be worth more than $30 billion each. Ma and his team developed them all from scratch.

On a major Chinese shopping holiday last year, Taobao and Tmall conducted transactions of over $5.75 billion in 24 hours. By contrast, on Cyber Monday 2013, the entire American online industry realized sales of $1.74 billion, it's biggest single-day haul ever.

With such successes on his resume, many analysts fear that Ma dangerously assumes he has the Midas touch. Silicon Valley monoliths have been lately scooping up smaller tech companies on a multi-billion-dollar spending spree, and Alibaba has followed suit. It has spent more than $6 billion on acquisitions and large stakes in strategic partners this year alone.

Some of these purchases — like AutoNavi, a Chinese Google Maps-style application, and UCWeb, a fast-growing mobile internet software developer — fit snugly into Alibaba's proven axis of mobile, e-commerce, and web logistics, but other transactions are outside of the box.

Ma recently spent $692 million for a chunk of InTime Retail, a department store chain in China that has been steadily losing customers to the web. The plan is to develop a new sales model that leverages their competitive advantages, but some analysts wonder whether bricks-and-mortar operations will prove a drag on the typically high-marginAlibaba.

They have reason to question Ma's due diligence, particularly after his $192 million investment for half of the Chinese soccer club Guangzhou Evergrande.

"I got Jack drunk in Hong Kong and afterwards asked him if he'd invest, and he said 'okay,' " team owner Xu Jiayin told Reuters. "The discussions were finished within 15 minutes."

Ma knows nothing about the sport, incidentally.

"I think not understanding soccer doesn't matter," he said. "I also didn't understand retail, e-commerce, or the internet."

Soccer clubs notwithstanding, spending heavily in search of the next explosive growth segment makes sense. Most of China's population is still without internet access. The growth of e-commerce in China is still in its early stages.

Post-IPO, Alibaba will continue to expand and pursue large takeovers. It recently launched 11 Main, an American web retailer, and a factory-direct marketplace called AliExpress. It has also invested around $1 billion in a variety of US tech startups, including Uber competitor Lyft. Its next targets could include the popular photo-messaging app Snapchat and internet-TV provider Roku.

With growing competition from an Amazon staunchly devoted to China and a committed and well-funded partnership between top-tier Chinese internet rivals Tencent and online retailer JD.com, Alibaba may yet find it difficult to maintain its lofty growth targets.

But considering Alibaba's assets, its market-leading position in a country of more than 1.3 billion people, and the outsized investment returns Ma has generated, it appears that the company is well-positioned — if its performance continues apace — to become the world's most valuable company within the next decade.