Alibaba and its finance affiliate, Ant Financial, are in talks to lead a round of at least US$1 billion into Ele.me, one of China’s leading food delivery startups.
Alibaba and its finance affiliate, Ant Financial, are in talks to lead a round of at least US$1 billion into Ele.me, one of China’s leading food delivery startups.
The fresh boost in capital will value Ele.me at US$5.5 billion to US$6 billion, and will help the startup battle against Meituan-Dianping, a competing service backed by Tencent, citing people familiar with the matter.
China’s food delivery industry reached a heyday of activity in 2015, the year that food delivery startup Meituan and daily deals service Dianping merged into one entity. That year, both startups employed cash-burning subsidies to win market share.
In particular, the two startups fit into Tencent and Ant Financial’s mobile payment strategy, where online services, peer-to-peer payments, and purchases at brick-and-mortar retailers are conducted through the phone. By investing in Meituan-Dianping and Ele.me, both tech giants can embed their digital wallets inside the food delivery apps and gather transaction data about customers.
