Koubei, the local services platform spun off from China-based e-commerce group Alibaba, is set to merge with food delivery service Ele.me with a large investment from telecommunications firm SoftBank, Bloomberg reported today.
SoftBank is in discussions to invest between $3bn and $5bn in the new entity through its Vision Fund, people familiar with the matter told Bloomberg, adding that talks are ongoing.
Koubei was launched by Alibaba and its financial services affiliate Ant Financial in 2015 to serve as a mobile portal for services such as restaurant bookings, short-term accommodation, travelling and retail, all linking to Ant’s mobile payment platform, Alipay.
Alibaba and Ant provided $480m of funding for Koubei when it was formed, and the spinoff secured $1.1bn more in a January 2017 round co-led by asset manager CDH Investments, investment firm Primavera Capital and private equity firms Silver Lake and Yunfeng Capital.
Temasek and Khazanah Nasional, which are owned by the governments of Singapore and Malaysia respectively, also took part in the 2017 round, which reportedly valued Koubei at $8bn.
Alibaba acquired Ele.me, an online restaurant reviews platform that had successfully made the jump to local food delivery, and which was already one of its portfolio companies, in April this year.
The deal valued Ele.me at $9.5bn and gave exits to investors including e-commerce firm JD.com and internet companies Tencent and Baidu. Ele.me’s app has 50 million monthly active users according to Bloomberg.
The merger deal is being lined up to combat Meituan Dianping, the local services and group buying platform that claimed 310 million “transacting users” and 4.4 million merchants as of June this year. It is reportedly seeking a $60bn valuation in a planned initial public offering.