Alibaba Group’s newly formed on-demand online services unit has rocketed in value to as much as 30 billion dollars after raising four billion dollars in fresh funds, people with knowledge of the situation told Reuters.
Alibaba combined the operation of food delivery service, Ele.me, and online restaurant guide business, Koubei, under a single management team and holding vehicle in October.
It announced a fundraising plan for the vehicle in August.
In a deal in April where Alibaba bought the shares it did not already own, Ele.me was valued at $9.5 billion.
Koubei was worth $8 billion at the end of last year, according to a list of unicorns published in March by a unit under China’s science and technology ministry.
More than $3 billion of the new funds came from Alibaba itself and SoftBank’s Vision Fund, the people said.
Primavera Capital Group and Alibaba affiliate, Ant Financial, which have already invested in Koubei, also joined in the fundraising, they said.
The company expects to close this financing round by the end of November, one source added.
Alibaba, SoftBank and Ant Financial declined to comment. Primavera did not immediately respond to a request for comment.
The people declined to be named because the information is confidential.
Alibaba said in August it had received commitments of more than $3 billion from investors including itself and SoftBank.
The fresh capital will give the unit ammunition in its intensifying battle with rival Meituan Dianping backed by Tencent Holdings for dominance of China’s booming online-to-offline (O2O) market where apps link smartphone users with bricks-and-mortar businesses to provide food delivery and other offerings.
(Reuters/NAN)
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