Alibaba buys Ele.me in $9.5 billion deal
hong kong — Alibaba Group Holding Ltd is buying full control of the startup Ele.me as it steps up efforts to expand in China’s fast-growing market for local delivery of food and other services.
The deal implies an enterprise valuation of $9.5 billion for Ele.me, Alibaba said in a statement on Monday, without saying how much it’s paying. Alibaba and affiliate Ant Small and Micro Financial Services Group Co already owned about 43 per cent of the startup’s voting shares. Alibaba paid all cash in the deal and has acquired all the shares formerly held by Baidu, according to a person familiar with the matter.
Ele.me — which means “hungry yet?” — operates an army of delivery people on motorbikes across the country and is vying for supremacy in the local services industry with Meituan Dianping, a startup backed by Alibaba rival Tencent Holdings Ltd. The market is surging as people increasingly turn to their smartphones to order food, schedule beauty treatments and hire domestic helpers. It’s also strategically important for Alibaba and Tencent as a means to promote their respective payment services.
“As one of the most frequently used applications, food delivery is the single most important entry point in the local services sector,” Daniel Zhang, chief executive officer of Alibaba Group, said in an internal email to staff on Monday.