Alibaba has signed an investment agreement with leading food delivery platform Ele.me, investing USD 1.25 billion. With this round of financing, Ele.me is estimated to be valued at USD 4.5 billion, and will be operated independently, reports Caixin.com, China’s leading financial media website.
It is reported that Alibaba has taken up to 27.7% of Ele.me, while CEO of Ele.me, Zhang Xuhao is left with less than 10%, following previous investments from Didi chuxing and the current round. This means Alibaba will become the biggest shareholder in Ele.me.
Ele.me turns to Alibaba, after losing support from China’s Yelp, Dianping, following the recent Meituan-Dianping merger. Ele.me recieved USD 80 million from Dianping in a series D financing last May.
The platform has competed fiercely since 2014 with Meituan Waimai, the takeout delivery service introduced by China’s Groupon, Meituan in late 2013.
According to the previous investment agreement of Dianping and Ele.me, Dianping had to leave its post on the Board of directors of Ele.me in order to merge with Meituan.
Partnering with six year old Ele.me in food delivery, Alibaba is able to beef up its late launched Koubei.com, a similar food delivery service, to compete with Meituan Waimai and Baidu-backed Baidu Waimai.
Besides Alibaba, Tencent and JD.com are also among the investors of Ele.me, having invested in an E Series financing in January 2015 and an F Series in August.
According to data released in December by Ele.me, its daily transaction volume amounts to RMB 100 million（USD 157M), with more than 3.3 million daily orders.