Alibaba funds $3bn from SoftBank to enhance food delivery business
The Alibaba-owned food delivery business, Ele.me, and Koubei has merged and received $3bn from China-based company, SoftBank, CNBC reports.
In its earning statement, Alibaba said: “As a result of this reorganization, subject to closing conditions, we will consolidate Koubei, which would result in a material one-off revaluation gain when the transaction closes.”
It is anticipated that the collaboration of Koubei and Ele.me will enable Alibaba to increase its reach into other smaller cities and towns.
It hasn’t been confirmed whether the investment by the Japanese conglomerate giant, SoftBank, is coming from its $100bn Vision Fund.
The move comes after it was confirmed that the bank has substantially invested in on-demand services such as ride-hailing apps like Uber.
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Alibaba is battling heavily with its close Chinese rival, Tencent, in the food delivery space as both companies compete to lead the online-to-online space.
The e-commerce giant, Alibaba, has posted an excellent quarter that ended in June, with results that posted 61% revenue growth.
Daniel Zhang, Chief Executive Officer of the Alibaba Group, said: “Alibaba had an excellent quarter, with significant user expansion and even more robust engagement across our growing ecosystem.”
“Our China retail market continues to gain share, with New Retail initiatives driving further revenue growth and enabling our retail partners to seamlessly serve customers.”