Alibaba’s On-Demand Services Unit Koubei to Raise $1.2 Billion

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Bloomberg on Koubei’s imminent funding round:

Alibaba Group Holding Ltd.’s on-demand services unit is close to securing $1.2 billion of funding for expansion after getting backing from first-time investors including Silver Lake Management and China’s sovereign wealth fund, people familiar with the matter said.

The latest round for Koubei, which deals in local services such as food delivery, will surpass a $1 billion target with backing from China Investment Corp., according to the people, who asked not to be named because the matter is private. The round also includes Yunfeng Capital, a fund backed by Alibaba co-founder Jack Ma, and values the two-year-old startup at about $8 billion, they said.

​In China, every market is big, even markets around people using location-based services:

Chinese users of location-based services could rise 29 percent to 400 million people next year, according to Shanghai-based internet consultant IResearch.

Ele.me, one of the largest food ordering services in China, which we briefly talked about here, could soon become a part of Koubei:

If Ele.me fails to reach a [new funding] deal, Alibaba, which is already Ele.me’s biggest shareholder with a 27.7% stake, may be able to take over control of the company.

The Internet giant is likely to integrate Ele.me with its own local on-demand service unit, Koubei. Alibaba will also be able to leverage its logistics platform Cainiao to the combined Ele.me-Koubei operation.

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