Ele.me, a Shanghai, China-based food delivery service, secured over $1 billion in funding.
Alibaba made the investment which – once finalized – will carry a value of $6 billion.
The financing will enable the the company to strengthen its position and compete with Meituan-Dianping.
FinSMEs
05/06/2017
THE PRESS RELEASE
Chinese Food Delivery App Secures over $1B Funding from Alibaba, Commented by Pacific Chiba Trust
A Chinese food delivery services has agreed with the tech titan Alibaba and its financial services arm to lead a round of funding of over $1 billion, noted Pacific Chiba Trust.
June 05, 2017 01:26 AM Eastern Daylight Time
TOKYO–(BUSINESS WIRE)–Pacific Chiba Trust reports on Ele.me, the food delivery service competing for slices of the great chines pie, will carry a value of $6 billion when the funding is finalised. The financing will strengthen the company’s position and will be competing head to head with Meituan-Dianping.
“After Tencent lost some market share in the restaurant space, they put a large budget to get gain back their place in the market”
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Alibaba sold $900 million worth of shares in Meituan-Dianping after they merged, a move which suggests Alibaba would rather be the biggest investor in the Shanghai-based company rather than being another big investor in Meituan-Dianping. Alibaba’s biggest rival, Tencent is also backing Ele.me’s competitor.
“The focus from the two tech giants on “on demand” services or “online to offline”, as they call it in the tech world, is meant to help promote their online and mobile payment services,” Head of Mergers & Acquisitions Louis Hunter at Pacific Chiba Trust explained.
Online payment services helped fuel the growth in the retail markets in china. As people prefer to use their smart phones or the web to order their food or hire a carpenter, the market for “on demand” services in China is expected to touch $ 1 trillion by the end of 2017.
“After Tencent lost some market share in the restaurant space, they put a large budget to get gain back their place in the market,” said Charles Harper who is the Head of Corporate Finance at Pacific Chiba Trust.
Alibaba recently secured $3 billion loan facility which suggests they will add more companies to their portfolio beside Ele.me, which translates from Mandarin to English as “are you hungry now?”, and Didi Chuxing (formerly known as Didi Kuaidi, and the only company in the Chinese tech market to have Alibaba, Tencent, and Baidu invested in it).
About Pacific Chiba Trust
Pacific Chiba Trust is a private wealth management company that provides both private and corporate clients access to the global financial markets. Base on fundamental data, Pacific Chiba Trust analysts and strategists evaluate macroeconomic moves to diagnose market situations for the investment team. An in-depth analysis will then be conducted to formulate actions in agreement with the final conclusions regarding one or another sector or asset. Since our establishment in 2006, Pacific Chiba Trust has accumulated a tremendous amount of experience in managing our clients’ resources. We currently handle over 3.5 billion USD in assets under management.