China’s Best Logistics raises $760m
Best Logistics Technologies, a China-based logistics and supply chain management business part-owned by Alibaba Group, has completed a $760 million round led by Everbright Financial Holding Asset Management and CITIC Private Equity.
Other new investors include Cainiao Network Technology, a logistics platform launched by Alibaba, China Development Bank International, Bank of China International-controlled CITP Advisors, Fosun International, SBCVC, Huarong International Financial, and Liyue Investment, according to a release.
A further two new investors have already been disclosed: the International Finance Corporation (IFC) committed $30 million, while CDIB Capital contributed $45 million.
A string of existing investors also re-upped, among them Alibaba, China Renaissance Capital Investment (CRCI), IDG Capital Partners, Foxconn Technology, Goldman Sachs, Walden International, CDH Investments, The Hina Group and GSI Investment.
Best Logistics was founded in 2007 by Johnny Chou, formerly co-president of Google China. The Hangzhou-based company's core businesses include providing express, less-than-truckload (LTL) freight and supply chain management services, primarily to e-commerce companies. It also offers financing for supply chain vendors, cross-border logistics and last-mile services.
As of January, the company operated 400 distribution centers and one million square meters of warehousing space in China, three warehouses in the US and one in Germany. It claimed to handle about six million parcels every day, while its freight service unit - Best Freight - delivers 6,400 tons of parcels per day.
Best Logistics provides third-party logistics services to approximately 200 corporate clients. Revenue came to RMB1.6 billion ($240 million) last year and is expected to reach RMB3 billion in 2016.
According to AVCJ Research, Best Logistics received an undisclosed amount of funding from Walden and CDH in 2010. Alibaba Group, The Hina Group and Walden then acquired a minority stake in the firm for $20 million in 2011.
The new funding will be used to develop new technology, improve express delivery services and strengthen Best Logistics' market position in the country. The company plans to expand into overseas markets and diversify into financial services within the logistics ecosystem, it said in the release.
As e-commerce continues to grow in China, demand for efficient and high quality delivery services is also increasing. Private capital is flooding into the logistics sector - coming directly from sovereign wealth funds and pension funds as well as through private equity funds.
Cainiao raised a round worth $1.5 billion in March from a group of investors including Singapore's GIC Private and Temasek Holding, Malaysia's Khazanah Nasional and Primavera Capital. Last year, The Carlyle Group also invested $120 million in Shanghai ANE Logistics, a Warburg Pincus portfolio company.
Goldman and Hina served as co-financial advisors for Best Logistics' latest funding round.
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