Alibaba’s local services platform Koubei completes $1.1b round
Koubei, a China online-to-offline (O2O) local services platform backed by Alibaba Group, has completed a $1.1 billion funding round led by Silver Lake, CDH Investments, Yunfeng Capital and Primavera Capital.
The round, which was completed this month, provides Koubei with a strong capital base to execute on its aggressive growth strategy, Alibaba said in its financial report. Singapore’s Temasek Holdings and Malaysia’s Khazanah Nasional also participated in the round, which is said to value Koubei at $8 billion.
Koubei was created in 2015 as a joint venture between Alibaba and its online financial affiliate Ant Financial. Each party put RMB3 billion (then $483 million) into the JV at that time. The platform initially focused on food and beverage but is eventually expected to expand into offline retail, healthcare and vending machines.
Alibaba had already backed another O2O business, Meituan, which merged with its rival Dianping in October 2015, but sold its stake last year in order to focus on its own platform. The new Meituan-Dianping entity, which provides restaurant reviews, group-buying, hotel reservations, movie ticket booking and food delivery services, subsequently raised $3.3 billion at a valuation of $18 billion. Investors included Tencent Holdings, DST Global and Temasek.
Koubei is integrated with Alipay, an online payment service run by Ant Financial. It has about 1.5 million merchants on its platform, handling more than 15 million orders per day. Alibaba disclosed that Koubei generated transactions worth RMB73.1 billion ($10.5 billion) in gross merchandise value (GMV) through Alipay in the third quarter of last year, representing a 52% increase over the prior quarter.
With the new funding, Koubei will continue to develop local life services solutions and data-driven products to enable offline merchants to increase operational efficiency through internet technology, Koubei CEO Chi Fan told local media. Part of the funding will also go towards expanding third-party partnerships and accelerating the establishment of a resource-sharing platform for Chinese local services providers, from online marketing to supply chain services.
Silver Lake, Primavera and Temasek invested in Alibaba Group ahead of its IPO in 2014. Primavera also participated in a Series A round for Ant Financial in 2015, and re-upped in a $4.5 billion Series B round last April at a valuation of $60 billion. Prior to that, the China-focused PE firm also invested in Ciaoniao Network Technology, a logistics platform launched by Alibaba, alongside Temasek, Khazanah Nasional and GIC Private.
Last May, CDH’s wealth management platform co-led a RMB1.7 billion Series A round for the online movie ticketing platform of Alibaba Pictures Group, together with Ant Financial and Sina Corp.
Yunfeng Capital was co-founded by Alibaba founder Jack Ma and David Yu in 2010.
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