Confirmed: Alibaba invested $1.25 billion in China’s top food delivery startup

Photo credit: Ele.me.

Chinese tech giant Alibaba has sure been busy of late. The ink is barely dry on its US$1 billion deal with Lazada, and now we’ve got confirmation that it has also invested US$1.25 billion in Chinese food delivery startup Ele.me.

Last week, we wrote that the investment had almost definitely happened because Alibaba’s Joe Tsai had joined Ele.me’s board, but neither side had officially confirmed the news or revealed the details of the transaction. Today, Ele.me finally spilled the beans.

The US$1.25 billion round is a joint investment by Alibaba and its finance arm Ant Financial. Alibaba contributed US$900 million, with Ant Financial kicking in the other US$350 million. Ele.me will continue to operate independently, but it will be getting mobile Taobao and Alipay integration to give it better access to Alibaba’s massive consumer base.

Ele.me will also be linking up for cooperative projects with Ant Financial, which will now offer financial services to Ele.me merchants and restaurants.

So what of Alibaba’s in-house Ele.me competitor, Koubei? That will be getting “operational support” from Ele.me, according to Ele.me founder and CEO Zhang Xuhao.

“With Alibaba’s online superiority and Ele.me’s offline superiority put together, we will cover a larger consumer base and close the circle on the O2O market,” said Zhang.

Separately, Alibaba also confirmed the details of the investment to Tech in Asia, and noted that the partnership would go beyond operational support from Ele.me for Koubei and commercial support from Alibaba for Ele.me. “Other areas of cooperation include cloud computing as well as map and financial services through Ant Financial,” an Alibaba spokesperson added. “We are confident the cooperation will benefit merchants and consumers alike through better services and logistical support.”