China-based last-mile delivery services provider Dada Nexus secured a $200m investment on Friday from e-commerce company JD.com and will merge with the latter’s logistics subsidiary JD Daojia.
JD.com will own a 47.4% stake in the combined entity once the deal closes in the second quarter of this year. The merged company will continue to operate under the Dada Nexus brand.
Founded in 2014, Dada Nexus operates a crowdsourced delivery platform currently available in 37 cities across China. It lists 1.3 million delivery contractors who together complete more than a million daily deliveries during peak periods.
JD Daojia was launched in April 2015 and has partnered with local supermarkets to deliver consumer goods within two hours following an order through a dedicated app. The service covers 13 cities and JD Daojia claims it has more than three million customers.
Philip Kuai, chief executive of Dada, and Zhijun Wang, president of JD Daojia, will retain their roles at the of the new entity.
Dada Nexus previously received $300m in series D funding in January 2016 from DST Global, the venture capital firm spun out of internet company Mail.ru, as well as Sequoia Capital and undisclosed additional backers. The round valued Dada at more than $1bn.
DST Global also led a series C round of undisclosed size in June 2015 that included Sequoia and Greenwoods Investment Management.
Dada raised an undisclosed amount of series A funding reported as several million dollars from Sequoia in 2014, and an eight-figure dollar amount of series B capital from unnamed investors later the same year, according to China Money Network.
Kuai said: “Dada is delighted to enter into this strategic cooperation, which marks a new phase of our business that will leverage our respective strengths to achieve greater efficiencies.
“We are grateful for the tremendous support that JD.com is providing, which will help drive the integration between JD.com’s premium brand, user base and supply chain, and Dada’s strength in delivery crowdsourcing.
“We are excited to further enhance product innovation and deliver a better and faster [online-to-offline] service experience for users.”