Alibaba confirms $1.1b funding for local services spin-off

Awwwww Yisssss. Photo credit: paylessimages / 123RF.

Alibaba today confirmed months of rumors that it has raised US$1.1 billion in funding for its spin-off Koubei business, which helps people find deals at restaurants, KFC, gyms, karaoke bars, and other local venues. (Hat-tip to TechCrunch’s Jon Russell for noticing this.)

Jack Ma’s company announced the investment in its earnings report today in which Alibaba raked in US$2.5 billion net income from total revenue – up 54 percent in the past year – of US$7.7 billion.

See: WeChat rolls out ‘mini programs’ in a bid to kill off apps

It’s Alibaba’s fightback against WeChat.

Koubei’s cash is from Silver Lake, CDH Investments, Yunfeng Capital, and Primavera Capital. Ma is one of the founders of Yunfeng.

The ecommerce titan today vowed to pursue “aggressive growth” with Koubei as it fights back against Tencent’s WeChat, which has forayed into online payments, in-store payments, ecommerce, fintech, and numerous other areas that have led the social media giant into a head-on clash with Alibaba’s services. Tencent also has a significant stake in Dianping, an app very similar to Koubei.

Alibaba set up Koubei mid-2015 as a US$970 million joint venture with its affiliate, Ant Financial, which runs Alipay. Koubei is accessible from within the Alipay app.