China-based e-commerce company Koudai Gouwu raised $350m on Wednesday in a series C round led by internet portal Tencent, which valued Koudai at almost $1.5bn.
Tencent provided $145m of the funding, taking a 10% stake in Koudai in the process. The other backers in the round were investment firms Tiger Global Management, DST, H Capital, Vy Capital and Falcon Edge.
Koudai operates as a mobile e-commerce platform through which merchants can sell directly to buyers online. Its previous investors reportedly include private equity firm Warburg Pincus and data and marketing software firm Jingwei.
A significant part of Koudai’s business model involves a partnership with the Tencent-owned microblogging platform WeChat, whereby WeChat users can buy products from Koudai shops through WeChat, which has almost 450 million monthly users.
The investment can be seen as the latest development in the battle between Tencent and e-commerce company Alibaba, its biggest rival in the Chinese internet space.
Tencent has traditionally been unable to match Alibaba in e-commerce, but its $215m investment in JD.com in March, combined with the Koudai stake purchase, signals an intent from the company to expand its capabilities in order to compete more directly, and to monetise its services more efficiently.