JD Logistics, the logistics subsidiary of China-based e-commerce firm JD.com, is aiming to raise at least $2bn in funding, Reuters reported today citing people familiar with the matter.
The round is expected to be co-led by hedge fund sponsor Hillhouse Capital and venture capital firm Sequoia China Capital. Other investors have not yet been named but include state-owned and international groups, the sources said.
Hillhouse Capital is currently the second largest shareholder in publicly-listed JD.com, according to data collected by data research firm Thomson Reuters. It owned a 13% in JD.com ahead of its 2014 initial public offering on Nasdaq, while Sequoia held 1.6%.
Potential investors will need to provide a minimum of $100m to participate, but backers that choose to invest at the lower end of the scale may be required to demonstrate they can help JD Logistics attract new business. The round would value JD Logistics at approximately $10bn.
The funding comes ahead of plans by JD to list the subsidiary, which it currently still owns outright after spinning it out in April 2017, on an overseas stock market sometime in the future.
JD has been busy investing in its logistics operations, putting money towards infrastructure across Southeast Asia beyond its initial commitments in Indonesia. It has also signed a partnership with Japan-based delivery services provider Yamato to ship to customers in China.
The corporate has also been aggressively pursuing other logistics solutions and was the first China-based corporate to invest heavily in drones.
The money is expected to help JD Logistics compete with rivals such as Cainiao, the logistics firm owned by e-commerce firm Alibaba, and to drive further international expansion efforts.