China's PE-backed Ele.me merges with Baidu Waimai
Ele.me, a Chinese food delivery ordering platform backed by Alibaba Holdings and several private equity investors, has confirmed its merger with Baidu Waimai, the food delivery business of Chinese internet giant Baidu.
Under the agreement, Baidu Waimai has become a subsidiary of Ele.me and will continue to operate under its own name. The deal reportedly valued Baidu Waimai at around $800 million and gives Baidu’s management a small stake in the combined entity. Baidu and Ele.me agreed to cooperate across a broad base of products and services, Baidu said in a statement.
Founded in 2009, Ele.me claims to work with more than 1.3 million restaurants across 2,000 cities, serving in excess of 260 million consumers. The company's logistics unit, Fengniao, has around three million couriers – including full-time staff in top-tier cities and part-time courier arrangements with third-party providers.
Ele.me has raised more than $2 billion since inception. This includes a $350 million Series E round in January 2015 and another $630 million round seven months later. Didi Chuxing subsequently invested an undisclosed sum.
Last year, Alibaba and its online affiliate Ant Financial invested a combined $1.25 billion, giving the business a valuation of about $6 billion. Sequoia Capital, CMC Capital, JD.com and Tencent Holdings have also backed previous rounds.
Baidu Waimai, which is focused on middle to high-end white collar workers and residential markets, was established in 2014. It now has more than one million restaurants across 300 cities, serving more than 100 million users. In 2015, it raised approximately $70 million from Chinese fast casual restaurant chain operator Ajisen Holdings and a PE fund managed by The Hina Group and its affiliate Hanking Group.
The merger between Baidu Waimai and Ele.com is a continuation of the broader consolidation in China’s internet industry across different verticals. Previous activity in this space includes the merger of online-to-offline (O2O) services platforms Dianping and Meituan in late 2015, and the unification of ride-hailing app operators Didi Dache and Kuaidi Dache.
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