Date
18 December 2017
Tencent and JD.com are among the investors in ele.com in this round of funding. Photo: Bloomberg
Tencent and JD.com are among the investors in ele.com in this round of funding. Photo: Bloomberg

Big investors plow US$350 mln into Shanghai food delivery firm

Ele.me, a food delivery service based in Shanghai, said it has raised US$350 million in Series E funding from Chinese firms CITIC, Tencent, JD.com, Dianping.com and legendary US venture capital firm Sequoia Capital (an early backer of Apple and WhatsApp).

The investment is notable because internet giant Tencent Holdings Ltd. (00700.HK), e-commerce firm JD.com and restaurant review site Dianping.com are closely aligned, the news website TechCrunch, which focuses on information technology, reported.

Tencent owns a 15 percent stake in JD.com and a 20 percent stake in Dianping.

Investing in Ele.me, which operates throughout China, could help the three businesses build their online-to-offline (O2O) strategies.

Alibaba and Baidu, Tencent’s main rivals, already have investments in food delivery services. Alibaba backs Meituan, while Baidu holds a majority stake in Nuomi. Both Meituan and Nuomi are group-buying sites that recently launched food delivery services.

In its announcement, Ele.me (which means “Hungry yet?” in Chinese) said it will continue to operate independently.

The firm, which serves 250 cities, with 200,000 restaurants and 20 million users on its platform, said its total order volume reached 110 million yuan (US$17.6 million) last year, with 75 percent of orders made through its mobile apps.

O2O is an important market for companies like Tencent, Baidu and Alibaba to tackle because it allows them to leverage their existing network of websites and mobile apps to bring users into traditional brick-and-mortar stores, opening up more ways to make money, TechCrunch said.

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