Alibaba set to lead $1bn investment in Ele.me
Alibaba Group is reportedly leading a US$1 billion investment round in Chinese mainland food delivery service Ele.me.
Unidentified sources have told DealStreet Asia that the latest round of funding would value the business at between $5.5 billion and $6 billion.
Alibaba will invest from its equity fund and through its Ant Financial subsidiary, the sources say. The funds will help arm Ele.me to compete with a rival service Meituan Dianping, backed by Tencent.
App-based Ele.me helps consumers order food, ire domestic helpers and make appointments for beauty treatments and other personal services.
Online and app sales in these categories are expected to top $1.1 trillion this year.
“While meal-delivery businesses around the world have struggled for profits, China’s two largest Internet companies see on-demand services as a way to promote their lucrative online payments services,” observed DealStreet Asia. “Growth in domestic food and restaurant transactions also outstrips many other retail segments in the world’s second largest economy.”