JD.com targets US$2bil fundraising at logistics unit
HONG KONG: China’s second-biggest e-commerce firm JD.com has kicked off a fundraising round at its logistics unit with a target of at least US$2bil, and eventually plans to list the business overseas, people with direct knowledge of the matter said.
JD.com, which only trails Alibaba Group Holding Ltd in China’s e-commerce market, has invited a select group of investors to join the funding round that values its logistics business, JD Logistics, at around US $10 bil, two of the people told Reuters.
The move comes as China’s major e-commerce companies are looking to bulk up their logistics businesses to support their global expansion ambitions and boost revenues by offering services to third-party entities.
Chinese investment firm Hillhouse Capital Group and Sequoia Capital China will likely be lead investors of JD Logistics’ funding round, while a number of state-owned and international investors have also shown strong interest in the deal, according to the people.
Demand could be strong enough that smaller investors putting up just US$100mil – the floor for investments, according to two people – would have to prove they could help the logistics unit to bring in new business, one of them said.
JD.com declined to comment. Hillhouse and Sequoia did not respond to requests for comment. The sources could not be named as the information is confidential.
JD Logistics is currently 100% owned by JD.com. It is not clear when and where the IPO process will be undertaken.
Hillhouse Capital is the second-biggest equity investor in JD.com, according to Thomson Reuters data. Alibaba rival Tencent Holdings is also a top-10 investor in JD.com, the data shows.
The fundraising and any ensuing spin-off would give JD Logistics – set up as a separate entity within the company last April – some independence and help it offer services to third-party clients as well as to compete with Alibaba’s logistics network Cainiao and delivery services firms such as SF Express, the people said..