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Alibaba just reported\u00a0a very impressive quarter of business<\/a>, but there was a small nugget of notable funding news tucked away in its announcement<\/a>. Koubei<\/a>, an Alibaba affiliate company focused on enabling local commerce, closed a $1.1 billion financing round this month.<\/p>\n The funding was led by\u00a0Silver Lake, CDH Investments, Yunfeng Capital and Primavera Capital, Alibaba said. It isn\u2019t clear what date\u00a0it\u00a0was completed other than it happened in January.<\/p>\n In October,\u00a0The Wall Street Journal reported<\/a>\u00a0that Koubei was in the process of raising $1 billion, but this is the first time it has been confirmed. The Journal claimed Koubei would be valued at nearly $8 billion, but we haven\u2019t been able to verify that yet.<\/p>\n Koubei is a joint venture founded in 2015 by Alibaba and Ant Financial, an Alibaba offshoot that manages its Alipay service and other financial\u00a0tech initiatives. The\u00a0idea behind it is to generate business for local retailers by bringing them\u00a0online,\u00a0while also offering new commerce opportunities for consumers. For example, helping a local pizza chain reach new customers or making a pop grocer more accessible to people with limited time to go in person.<\/p>\n Alibaba and Ant Financial both put\u00a0RMB 3 billion<\/a> (worth around $480 million at the time) into Koubei when it was created, but this round marks the first money\u00a0from\u00a0external investors.<\/p>\n According to Alibaba\u2019s latest data, $10.5 million (RMB 73.1 billion) was spent\u00a0through Alipay alone on the Koubei service during Alibaba\u2019s Q3 period. The firm said that figure was a 52 percent increase on the previous quarter, but it isn\u2019t saying how much money Koubei is losing right now. You can bet your bottom dollar that it is burning a lot right now since there is plenty of competition in the market. Plus,\u00a0Alibaba can afford to speculate to accumulate and it is actively diversifying its revenue streams to lessen its dependency on\u00a0its core e-commerce services.<\/p>\n Meituan-Dianping, a company formed by a multi-billion dollar merger, is the biggest fish in China\u2019s offline-to-online pond. One year ago, it raised a $3.3 billion funding round<\/a> at a valuation of $18 billion. Back then in January 2016, it claimed to have processed RMB 170 billion ($25.84 billion) in gross merchandise volume during 2015. It added that it was\u00a0serving\u00a0150 million monthly users and handling around\u00a010 million orders each day.\u00a0That puts some perspective on Koubei\u2019s data.<\/p>\n There\u2019s also Ele.me which counts Alibaba as one of its investors. Alibaba and Ant Financial \u2014 those two again<\/em> \u2014 made a $1.25 billion investment in the company<\/a> last summer, but it appears that the idea is for Ele.me to work with, not against, Koubei.<\/p>\n Given that competition it is no surprise that Alibaba was keen to bring in further investment. The e-commerce giant said that the funding round \u201cprovides Koubei with a strong capital base to execute on its aggressive growth strategy.\u201d<\/p>\n There\u2019s plenty of precedent for Alibaba affiliate companies raising money from investors. Ant Financial, which is tipped to go public, pulled in $4.5 billion at a massive $60 billion valuation<\/a>\u00a0last year,\u00a0while logistics affiliate Cainiao raised a round<\/a>\u00a0that values it at a reported $7.7 billion.<\/p>\n","protected":false},"excerpt":{"rendered":"![\"koubei\"](\"https:\/\/tctechcrunch2011.files.wordpress.com\/2017\/01\/screenshot-2017-01-24-20-15-35.png?w=680\")
Alibaba just reported\u00a0a very impressive quarter of business, but there was a small nugget of notable funding news tucked away in its announcement. Koubei, an Alibaba affiliate company focused on enabling local commerce, closed a $1.1 billion financing round this month. The funding was led by\u00a0Silver Lake, CDH Investments, Yunfeng Capital and Primavera Capital, Alibaba said. It isn’t… Read More<\/a><\/p>\n\n<\/img><\/a>
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