Alibaba Group’s new on-demand services subsidiary – a combination of Ele.me and Koubei – has raised another $4 billion, bringing its total valuation up to $30 billion, according to Reuters citing people familiar with the matter.
Alibaba merged Koubei and Ele.me in August to compete with Meituan in the on-demand services sector. Meituan was listed in Hong Kong in September and currently stands at a market cap of about HK$ 305.4 billion (US$39 billion).
Prior to this merger, Ele.me’s valuation stood at $9.5 billion in April; Koubei was valued at $8 billion by end-2017.
Backers of this recent round include Alibaba, SoftBank, Primavera Capital Group, and Ant Financial, with Alibaba and SoftBank contributing to more than 75% of the $4 billion.
SoftBank and Alibaba have a long history of co-investing. And SoftBank per se is an early investor in Alibaba.
The Information recently reported SoftBank’s current discussions on a potential investment into the Alibaba-backed Hellobike for a slice of China’s bike-sharing market.
Another case in point would be Alibaba and SoftBank’s investment into Paytm – an online shopping venture, as it takes on other rivals like Amazon and Flipkart in India.
However, caution has to be exercised even as Alibaba joins SoftBank in multiple investments. Alibaba is, in essence, first a technology company and if care is not exercised, the same critics to Tencent’s investment patterns can be applied to the e-commerce giant. The balance of how these investments will add value to Alibaba’s business has to be in place, as SoftBank works like an investment company at heart.
Editor: Ben Jiang