Deals | JD.com Raising $2.5bn for its Logistics Arm

JD.com iss raising up to US$ 2.5bn for its logistic arm JD Logistics from a group of investors including Hillhouse Capital, Sequoia China, and Tencent among others.

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JD.com, China’s largest online retailer, said Wednesday it’s raising up to US$ 2.5bn for its logistic arm JD Logistics from a group of investors including Hillhouse Capital, Sequoia China, and Tencent among others. The funding will be used to help develop state-of-the-art logistical technologies in areas like automation, drones and robotics.

The deal is expected to be completed in the first quarter of 2018. And JD.com will remain the majority stakeholder with an 81.4 percent stake.

JD said in a statement that it’s the single largest funding in Chinese logistics industry.

Richard Liu, Chairman and CEO of JD.com said that “This current funding round sets the stage for us to further invest in expanding our lead in the sector in areas like automation, drones and robotics. JD Logistics will continue to support both JD.com’s e-commerce business and the logistical needs for a wide range of industries for years to come.”

Though only set up shop as a stand-alone subsidiary in last April, JD’s logistics operations were established in 2007. In its competition with Alibaba’s e-commerce business, which works with 3rd party logistics partners to ship orders, JD’s fast and reliable delivery has earned itself a considerable reputation among customers. In many big Chinese cities, JD.com is able to provide same-day delivery with the help of JD Logistics.

WANG Zhenhui, CEO of JD Logistics, said that the financing “will enable JD Logistics to further enhance its smart supply chain network with openness and integration.”

In addition to serving its parent, JD Logistics also opens its logistics network and service capacity to other companies, usually e-commerce sellers.

Writer: Ben Jiang