E-commerce group Alibaba could fully acquire Ele.me, the China-based food delivery service in which it already owns a substantial stake, Bloomberg reported yesterday, citing a person familiar with the matter.
Alibaba reportedly invested $1bn in Ele.me May 2017 at a valuation of $5.5bn to $6bn, increasing its share to 23% and Ele.me’s overall funding to approximately $3.35bn in the process.
The firm plans to buy out Ele.me’s other shareholders, which include Tencent, fellow internet group Baidu and e-commerce company JD.com. Alibaba values Ele.me at $9.5bn, according to Chinese tech news site 36kr.
Ele.me runs an app-based food delivery service that has a 49.8% share of the market in China, according to Bloomberg.
The company agreed in August 2017 to pay up to $800m to acquire Xiaodu, which operated Baidu’s online food ordering business, as part of a deal Bloomberg implies gave Baidu an equity stake in the company.
Ele.me’s early funding came from Matrix Partners, Sequoia Capital and GSR Ventures, before food listings platform Dianping, now part of local services platform Meituan-Dianping, invested $80m in 2014.
Dianping joined Tencent, JD.com, Sequoia Capital and Citic PE for a $350m series E round in 2015, before Ele.me closed a $630m series F later the same year featuring Tencent, JD.com, Sequoia, Citic, retailer group Hualian, China Media Capital and Gopher Asset.
Alibaba and its financial services affiliate, Ant Financial, subsequently supplied $1.25bn for the company in 2016 at a $4.5bn valuation, the companies reportedly holding 27.7% of its shares between them once the deal had closed.