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Tencent Widens China’s Food Delivery Fight With $350M Investment

This time it’s food deliveries. The latest round in the three-way battle between China’s Internet giants has made social networks leader Tencent an investor in Shanghai-based food delivery service company Ele.me, the Wall Street Journal reported on Tuesday (Jan. 27).

Ele.me raised $350 million in the Series E round whose investors included Tencent, e-commerce company JD.com (which is 18 percent owned by Tencent), the Yelp-like restaurant review and group buying site Dianping (20 percent owned by Tencent), Citic PE and Sequoia Capital. The round brings total investment in Ele.me to $455 million.

As usual, where one of China’s biggest Internet companies — Alibaba, Tencent and Baidu — appears, the other two have either been there already or are on their way. Last week, Alibaba-backed Meituan.com, a Dianping competitor that also does food delivery, announced that it raised $700 million in a Series D funding round. Baidu, China’s search giant, in 2013 bought a majority stake in Nuomi, which competes against Dianping and Meituan. And Tencent is also an investor in another food-delivery startup, Line0.

A successful Ele.me could help drive transactions for Tencent’s WeChat mobile payment system, which is struggling to gain ground against Alibaba’s dominant Alipay affiliate.

Along with food and money, Alibaba, Tencent and Baidu are slugging it out across an increasingly wide swath of Chinese consumer life. For example, last summer Alibaba and Tencent finally called a truce in a six-month taxi-hailing fare war between Alibaba-backed Kuaidi Dache and Tencent-backed Didi Dache. (Baidu invested in Uber instead.)

And both Tencent and Alibaba have obtained government permission to open private online banks and provide credit-rating services in China. The Tencent-backed WeBank opened its virtual doors on a limited basis this month with a roughly two-month head start on the online bank that Alibaba plans to launch, which is tentatively named MyBank.

Both companies were also approved this month to offer credit-scoring services, with Alibaba launching first and Tencent planning to join its rival soon.

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New PYMNTS Report: The CFO’s Guide To Digitizing B2B Payments – August 2020 

The CFO’s Guide To Digitizing B2B Payments, a PYMNTS and Comdata collaboration, examines how companies are updating their AP approaches to protect their cash flows, support their vendors and enable their financial departments to operate remotely.

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