Alibaba invests $1.25b in food delivery platform Ele.me

Alibaba committed $900 million while Ant Financial put in $350 million, according a statement posted on Alizila, Alibaba's corporate news website. Ele.me will continue to operate independently, while Joe Tsai, Alibaba's executive vice chairman, will join the company's board of directors.

Following the investment, Alibaba and Ant Financial will help consolidate Ele.me's market-leading position by leveraging the user base of mobile e-commerce site Taobao and online payment Alipay. Meanwhile, Ele.me will assume operation of Koubei's online food ordering and delivery services. Koubei is a local online-to-offline (O2O) service platform launched last year by Alibaba and Ant Financial with nearly $1 billion in funding.

Founded in 2009, Ele.me claims to work with more than 500,000 restaurants across 300 cities, serving in excess of 50 million consumers. The company has around 4,000 full-time couriers located in first and second-tier cities and a network of over 200,000 part-time couriers through arrangements with third-party providers. 

Chinese online delivery platforms facilitated RMB45.8 billion ($7 billion) in transactions last year, up 200% from 2014, according to consultancy Analysys International. The market is expected to reach RMB245 billion in 2018. As of last November, Ele.me controlled about a third of the online food delivery market. 

Ele.me has raised more than $1 billion since inception. Last August, it raised a $630 million Series F round, valuing the business at more than $3 billion. Three months later, Chinese ride-hailing app operator Didi Kuaidi invested an undisclosed amount in Ele.me, with a view to cooperating with the food-ordering platform in delivery services.

Didi Kuaidi's investment came after Chinese restaurant reviews and group-buying platform Dianping, which is an early backer in Ele.me, agreed to merge with its competitor Meituan. As an O2O services provider, Meituan has a food-ordering vertical that competes with Ele.me, Baidu Delivery and Koubei. Alibaba was an early investor in Meituan, but after the Dianping merger, it said it would exit the company in order to focus on Koubei.

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