Chinese eCommerce company JD.com Inc.’s logistics unit is in early discussions with various banks about a potential initial public offering (IPO) that could raise $8 billion to $10 billion, according to sources close to the matter, Reuters said.
JD Logistics is aiming for a valuation of at least $30 billion, according to the sources, who declined to be named, said published reports on Monday (Dec. 23). The company is expected to select banks for the IPO in the second quarter of 2020 and plans to use the funds for warehouse expansion and potential acquisitions, a source said.
The second-largest Chinese e-commerce company after Alibaba, JD.com declined to comment on the potential IPO. Details on the timing and stock exchange have not been finalized, sources noted, though the listing could happen in Hong Kong or New York, and key numbers are subject to change.
In 2017, JD.com spun off its logistics unit and then opened up the latter’s delivery and warehousing services to third-party companies. Then the division raised $2.5 billion in a 2018 funding round that included investment funds from Sequoia Capital China, Hillhouse Capital Group, China Merchants Group, Tencent Holdings, and China Life Insurance. After the fundraising, the company’s valuation reached about $13.5 billion. As of Sept. 30, JD Logistics operated more than 650 warehouses, covering a total gross floor area of about 16 million square meters.
In June 2018, Google invested $550 million into JD.com to gain a foothold in the Asian markets. In exchange, Google received a 1 percent stake in the company. As part of the deal, Google would promote JD.com products on its shopping service, to expand the company’s reach beyond China and Southeast Asia.