Alibaba’s logistics affiliate lands a billion dollar funding at a valuation of $7.7 billion
Alibaba Group Holding is on a roll this year and it happens to be a perfect time for all the affiliated companies this month. It was reported last month that Alibaba’s main financial arm, Ant Financial, who also owns and operates Alipay along with other businesses is close to raise funds of up to $1 billion in an attempt to increase its valuation to $60 billion. But that is in the past. Now a three year old backed logistics firm, Cainiao, confirmed its first ever external fundraising from Primavera Capital in China, Khazanah Nasional in Malaysia, and GIC and Temasek Holdings in Singapore.
So far, the size of the fund raiser is not revealed publically. Alibaba Group also refused to provide financial details when Tech Crunch asked for it. But according to Caixin, which is a financial news web page, it is reported that the deal is an upwards of $1.54 billion (10 billion Yuan) at a $7.7 billion (50 billion Yuan) valuation.
Alibaba is well known for its billion dollar e-commerce business which is one of the largest in the world. It is also famous for other feats of which one include holding of the largest US Initial Public Offering (IPO) in the history. Alibaba is a huge company if someone actually dug deeper. It has numerous affiliate companies which cover the related verticals i.e. related to its main e-commerce business but does not include them in the parent company. Cainiao is one of them.
Cainiao is a logistics firm backed by the Chinese e-commerce giant which was created back in 2013 with a goal to be a UPS-like shipping firm. The reason for its establishment was to allow deliveries to and from China and other international markets. Apart from this, the goal was to also tap in the big data industry as well as other technology that would help in increasing the efficiency.
The logistics firm has about 128 warehouses and 18,000 express delivery stations throughout China. Cainiao has developed itself as a dominant force in the shipping and delivery space is accountable for 70 percent of the market share when it comes to express packages. Being one of the biggest in the regions and the number of orders it receives due to the ever growing Alibaba business, it offers same day delivery service in seven cities of China whereas next day delivery service in other 90 Chinese countries.
Bloomberg reported that Cainiao plans to expand its network to 2,800 destinations across its mainland and 224 countries and regions across the world by the end of this month. As it is believed, in order to fund its expansion the logistics firm is focusing on the public offering in the coming times. The CEO Tong Wenhong claims that it is in the position to ship and deliver almost 200 million express packages daily.