China online retailer raises $1b for finance unit

According to a statement, the round values JD Finance at RMB46.65 billion on a fully-diluted, post-investment basis. JD.com will maintain majority ownership following the deal, which is expected to close in the first half of 2016.

JD Finance's funding puts JD.com with Alibaba Group in the club of Chinese online commerce giants who are trying to leverage their technological experience to disrupt traditional industries. The company plans to offer financial services to Chinese consumers and innovative start-ups, along with more traditional enterprises.

Alibaba's Ant Financial is JD.com's major rival in this space. The company was built around its Alipay payment system and is not part of the US-listed parent. It raised separate funding rounds last year: an investment of an unspecified amount by China Post Capital in September; and a June round with participation from China's National Council for Social Security Fund that was said to value the firm at over $40 billion.

JD.com and its backer Tencent Holdings benefit from promoting an alternative to Alipay, whose dominance in the payment space gives it leverage over its rivals. JD.com has also backed payment platform Fenqile.com, committing an undisclosed amount to the start-up last March.

Attempts by tech giants to disrupt established sectors extend to insurance as well. Last year search engine operator Baidu formed a joint venture with German insurer Allianz and China-based Hillhouse Capital to sell insurance products online in China. In 2014 Alibaba and Tencent joined Ping An Insurance to set up Zhong An Online Property Insurance, which raised RMB5.78 billion from a group of investors last June.

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