E-commerce group Alibaba yesterday confirmed that it had merged local services spinout Koubei and food delivery platform Ele.me into a single entity with $3bn from investors including telecommunications firm SoftBank.
Alibaba disclosed the information in its Q2 2018 financial results, which confirmed recent reports that Koubei, spun off in 2015, and Ele.me, which it acquired in May this year, had been joined into a single, as yet unnamed vehicle.
The entity has so far received more than $3bn in funding from SoftBank and Alibaba itself, and will look to raise further money from Alibaba and its financial services affiliate Ant Financial as well as external investors.
The vehicle will be focused on Alibaba’s resources, such as Ant Financial’s mobile payment offerings and the corporate’s loyalty membership service, 88VIP, which will incorporate local services through the combined offering.
Local retailers using Alibaba’s retail management platform, Lingshoutong, will also be able to access delivery services through the merged service.
Alibaba is thought to have made the move to counter Meituan Dianping, the local services portal formed by the merger of group buying service Meituan and online services review platform Dianping.
Meituan Dianping has filed to go public in Hong Kong in an initial public offering that could value it at as much as $60bn. Its largest investor is Alibaba’s chief rival in China’s online services space, internet group Tencent.
Koubei received $480m from Alibaba and Ant Financial at launch, before adding $1.1bn in a January 2017 round co-led by Silver Lake, CDH Investments, Primavera Capital and Yunfeng Capital and backed by sovereign wealth funds Temasek and Khazanah Nasional.
Alibaba itself increased revenue for the quarter 61% year on year to $12.2bn, though its net income declined 45% to almost $1.16bn over the same period.