Chinese e-commerce giant Alibaba and an affiliate part-owned by its founder Jack Ma will invest a total of $1.25 billion in an online food delivery firm, the companies said, as Alibaba diversifies its activities.
Alibaba will invest $900 million and Ant Financial will add another $350 million (roughly Rs. 2,330 crores) in the Chinese online-to-offline food delivery firm Ele.me, Alibaba said in a statement on Thursday, without giving a size for the stake.
Chinese business magazine Caixin reported in December that a $1.25 billion (roughly Rs. 8,323 crores) investment would make Alibaba the biggest shareholder in the food firm with a 27.7 percent stake, valuing the startup at $4.5 billion (roughly Rs. 29,965 crores).
“We are confident the cooperation will benefit merchants and consumers alike through better services and logistical support,” Alibaba said.
Shanghai-based Ele.me claims to be China’s biggest online food delivery platform, with more than CNY 100 million (roughly Rs. 99 crores) in daily transactions and a user base of more than 50 million people, it said in a separate statement.
Alibaba’s Taobao platform is estimated to have more than 90 percent of the consumer-to-consumer market in China, while Alipay, a Paypal-like service under Ant, handles around 80 percent of online payments in China.
Alibaba has been keen to expand outside its core e-commerce business. It bought mobile shopping and dining information app Koubei for $1 billion (roughly Rs. 6,659 crores) in June and snapped up video streaming service Youku Tudou in another multi-billion dollar deal in November.
Alibaba also just announced a $1 billion investment in a leading online shopping platform in Southeast Asia, Lazada.