Jan 25, 2017 06:41 AM

Alibaba’s Local Services Platform Koubei Raises $1.1 Billion

(Beijing) – Koubei, a local service platform backed by e-commerce giant Alibaba Group Holding, closed a $1.1 billion round of financing this month, according to Alibaba’s latest financial report Tuesday.

The investor group includes the U.S. private equity firm Silver Lake Partners, according to Alibaba. Other participants are Yunfeng Capital, a private equity fund controlled by Alibaba founder and Chairman Jack Ma; CDH Investment; and Primavera Capital Group.

China’s sovereign wealth fund China Investment Corp. also invested $100 million to $150 million, although details of the transaction are still under negotiation, a person close to the transaction told Caixin. A source close to CIC confirmed the investment.

The person close to the transaction said the latest round of Koubei fundraising was invitation-based. The company has been approaching investors since August 2016, and most of the funding has been put in place.

“This transaction provides Koubei with a strong capital base to execute on its aggressive growth strategy,” Alibaba said in the statement.

Koubei is a 50-50 joint venture founded in 2015 by Alibaba and Ant Financial Services Group, the operator of Alipay, which is also controlled by Jack Ma. The goal is to seize a share of China’s fledging online local-services market. Koubei offers online users access to a wide range of services from restaurant reservations to movie ticket booking.

In the quarter that ended Dec. 31, 2016, Koubei generated 73 billion yuan of transactions, an increase of 52% from the previous quarter, according to the Alibaba financial report.

Koubei chief executive officer Samuel Fan said in a recent interview with Caixin that the company would continue to expand partnerships with offline vendors this year and look to turn profitable in 2019.

Koubei currently has 1.5 million business partners and plans to increase the total to 5 million in 2017.

Koubei is a piece of Alibaba’s massive business jigsaw in the increasingly competitive online-to-offline sector, or O2O, a business strategy that connects online users with offline services. The major rival of Koubei is a similar service provider, Meituan, backed by messaging giant Tencent Holding.

Koubei’s most valuable asset may be data on businesses and customers that it holds, one of the company’s investors told Caixin.

Last year, Alibaba and Ant Financial invested $1.25 billion in, a food-delivery app that also competes with Meituan. is close to completing a new round of fundraising and may announce it in the coming months, sources close to the matter told Caixin.

Contact reporter Han Wei (

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