IFC proposes joining $700m round for Alibaba logistics unit
The International Finance Corporation (IFC) is considering investing up to $30 million in Best Logistics Technologies - a Chinese logistics business partly-owned by Alibaba Group - as part of a $700 million pre-IPO funding round.
Best Logistics was founded by Johnny Chou, formerly co-president of Google China, in 2007. The Hangzhou-based company's core businesses include providing express, less-than-truckload (LTL) freight and supply chain management services focused on e-commerce sector. It also offers financing for supply chain vendors, cross-border logistics and last-mile services to improve the efficiency of logistics services.
The company operates 400 distribution centers and one million square meters warehouses in China, three warehouses in the US and one in Germany. It claims to handle about six million parcels every day, while its freight service unit - Best Freight - delivers 6,400 tons of parcels per day. At present Best Logistics provides third-party logistics services to approximately 200 corporate clients.
The new capital will be used to finance the company's expansion and acquisitions, reaching the appropriate scale for a planned IPO, said an IFC statement.
According to AVCJ Research, Best Logistics received an undisclosed amount of funding from Walden International and CDH Investments in 2010. Alibaba Group, The Hina Group and Walden International acquired a minority stake in the firm for $20 million in 2011.
Taiwanese electronics manufacturer Foxconn Technologies, China Renaissance Capital Investments, IDG Capital Partners and Goldman Sachs are also shareholders in the company, the statement said. Alibaba is the largest shareholder with a reported interest of 27.43%.
Spurred by a lack of high-quality supply and rising demand from retail customers, private capital is flooding into China's logistics sector - coming directly from sovereign wealth funds and pension funds as well as through private equity funds. Warehousing providers and third-party logistics players are popular targets.
In June last year, The Carlyle Group agreed to invest $120 million in Shanghai ANE Logistics. Last week, Warburg Pincus led a $100 million Series C round of funding for Yunniao Distribution, a platform for sourcing intercity courier services in China.
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