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Alibaba-backed logistics site rumored to close financing

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Rumors are proliferating that Alibaba’s subsidiary Cainiao will soon close its first round of financing, mainland media outlets reported on Tuesday.

Sina Tech quoted a source close to the deal, saying that large foreign VCs including Temasek, Morgan Stanley, the Abu Dhabi Investment Authority, Government of Singapore Investment Corp. and Malaysia’s Khazanah Nasional Berhad are among the list of VC bidders.

Cainiao was founded in Shenzhen in 2013, with registered capital of RMB five billion (USD 767.5 million). Its shareholders include Chinese e-commerce giant Alibaba, investment groups Fosun and Yin Tai, Forchn Holdings, and leading Chinese delivery companies including S.F. Express, ZTO Express, YTO Express, STO Express and Yunda Express.

Cainiao is an open platform that connects e-commerce companies, logistics companies, warehouses and third-party service providers. After obtaining customers’ orders, it allocates the nearest logistics company to carry out the delivery, aiming to deliver goods to the customer in 24 hours.

According to Cainiao, over 70% of parcels in China are distributed through the company’s network. It claims to have 1.7 million logistics and delivery workers and thousands of Chinese and overseas logistics and warehouse companies on the platform.

Driven by e-commerce, China’s logistics industry has been booming in recent years. Alibaba-backed YTO Express announced its listing plan in January. ZTO Express plans to launch its IPO in the US later this year or in early 2017. China’s largest delivery company, S.F. Express, also plans to list on China’s domestic stock market.

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