Koubei, an affiliate of Alibaba that enables local commerce, raised $1.1 billion in a round of financing in January.
According to Alibaba, which announced the fundraising in conjunction with reporting earnings, Koubei generated RMB 73.1 billion ($10.5 billion) in payment volume transacted through Alipay during the December quarter, representing a 52 percent increase over the prior quarter. In January, Koubei completed a $1.1 billion equity financing led by Silver Lake, CDH Investments, Yunfeng Capital and Primavera Capital. This transaction provides Koubei with a strong capital base to execute on its growth strategy, Alibaba said in a news release.
In a Wall Street Journal report back in October, the paper said Koubei was raising $1 billion, but that move wasn’t confirmed until Alibaba’s announcement Tuesday (Jan. 24). With the $1 billion in funds, WSJ said at the time, the company would be valued at close to $8 billion. Koubei is a joint venture company founded in 2015 by Alibaba and Ant Financial. The service is designed to help local retailers get online and offer new commerce opportunities for consumers in China. A report by TechCrunch noted Alibaba and Ant Financial invested around $480 million in Koubei back in 2015. The $1.1 billion raise is the first time the startup received investments for outside investors, noted the report.
In July 2015 reports, which were ultimately confirmed, it surfaced that Alibaba Vice Chairman Joseph Tsai had been selected to lead Koubei’s board to help the company boost its presence into the local services market. Koubei is an expansion of Alibaba/Alipay’s mobile business that seeks to blend the real world and online shopping experience into a single, fluid, commerce event — mainly by focusing on restaurants and brick-and-mortar stores.