Menlo Park-based Silver Lake Investments along with Chinese private equity firms CDH Investments, Yunfeng Capital and Primavera Capital have led a $1.1 billion financing round for the Hangzhou-based e-commerce company Koubei, according to the Alibaba Group’s December 2016 earnings report released on 24 January.
China’s sovereign wealth fund China Investment Corporation has also reportedly invested approximately $150 million in this round.
The funding round values Koubei close to $8 billion, according to a Bloomberg report. This is also the first-time that external investors have backed Koubei according to Chinese e-commerce giant Alibaba.
Commenting on the deal Alibaba said in its report: “This transaction provides Koubei with a strong capital base to execute on its aggressive growth strategy.”
In June, 2015 Alibaba together with payment services affiliate Ant Financial each agreed to invest 3 billion yuan ($437 million; €407 million) to set up Koubei. The platform provides online-to-offline services ranging from marketing, payments and booking to local Chinese businesses. The company initially drew its business on food delivery however it is now looking to expand its services by allowing merchants to have online stores on Koubei’s platform.
Koubei handles around 10 million orders per day and serves 150 million monthly users. In the fourth quarter of 2016, the company generated 73.1 billion yuan in payment volumes transacted through the payment platform Alipay, representing a 52 percent increase over the previous quarter.
The private equity firms in the consortium are active tech and services investors in China.
Beijing-based Primavera and Ant Financial teamed up in September last year to acquire the China business of Yum! Brands, owner of KFC and Pizza Hut, for a combined $460 million.
CDH has made investments in outdoor advertising firm Focus Media and co-working space start-up Foundtown, while Yunfeng has backed news portal QQ.com and biomedical electronics company Mindray.
Meanwhile Silver Lake is an early backer of Alibaba, investing $500 million in 2011 and 2012.