JD.com’s logistics business raises $2.5B from Hillhouse, Sequoia China and others

JD.com, the Chinese e-commerce giant that is Alibaba’s closest rival, is raising giving its logistics spin-out business a huge boost after it announced that the unit is raising $2.5 billion.

JD Logistics, which became a standalone business last April, is raising the investment capital from a range of backers who include Hillhouse Capital, Sequoia China, China Merchants Group, Tencent, China Life, China Development Bank Capital FOF, China Structural Reform Fund and ICBC International, according to a press release announced today.

JD.com confirmed it will remain the majority shareholder with a stake of 81.4 percent. The transaction, which is JD Logistics’ first outside funding event, gives the division a valuation of around $13.5 billion.

It may sound unconventional to spin out division into standalone businesses, but it is fairly common among China’s top tech firms. JD.com itself span out its financial services arm and that business raised just over $1 billion last year. Indeed, Sequoia China participated in funding for both JD.com spin-outs.

Alibaba itself operates a range of affiliates, including $60 billion valued Ant Financial — which it is in process of acquiring one-third of — and a logistics unit called Cainaio.

Cainiao was formed by a consortium of existing logistics players to give the project a running start with resources and customer bases. Alibaba itself took a 48 percent stake, and Cainaio later raised undisclosed funding at a reported valuation of $7.7 billion.

JD.com operates seven fulfillment centers and 405 warehouses in China. It has long prioritized logistics, more so than perhaps even Alibaba.

The company’s network includes fresh produce which requires an efficient network for transportation and management. Elsewhere, it has tested drone delivery and it plans to invest more heavily in logistics automation, including automated warehouses and drone deliveries.

That’s set to continue after this infusion of capital, JD.com CEO and Chairman Richard Liu explained.

“Our decision early on to build out our own logistics network has paved the way for JD Logistics to become the industry leader it is today. The shift throughout global e-commerce towards our model is vindication of the path we chose. This current funding round sets the stage for us to further invest in expanding our lead in the sector in areas like automation, drones and robotics,” he said in a statement.

There may also be synergies in Southeast Asia, where JD.com has made a range of investments including deals in Thailand, Indonesia and Vietnam.

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JD.com leads investment in Vietnam-based e-commerce service Tiki

JD.com, the Chinese e-commerce firm that rivals Alibaba, has continued its expansion in Southeast Asia with an investment in Vietnam-based Tiki, a seven-year-old online retail service.

JD.com is leading a Series C investment round in Tiki alongside VNG, the Vietnam-based online media and gaming company that is already an investor. The round itself is undisclosed, but TechCrunch understands that it is in the range of around $50 million overall.

The deal sees JD.com become “one of Tiki’s largest shareholders,” the companies said. The duo plan to work together to support Tiki on merchandising, cross-border opportunities, logistics, fulfillment, tech and more.

JD.com is aiming to grab a larger share of Southeast Asia’s growing opportunity. The region’s e-commerce market is predicted to grow to $88 billion by 2025 up from $10.9 billion last year, according to report from Google and Temasek.

The firm moved into Southeast Asia with an e-commerce service in Indonesia in 2015 and last year it has created an e-commerce and fintech joint-venture in Thailand alongside physical retail giant Central. It also made notable investments: backing ride-hailing startup Go-Jek in Indonesia and Thailand-based regional fashion marketplace Pomelo.

“We are very excited to continue our Southeast Asia expansion with Tiki, a company that has a deep understanding of Vietnam and a reputation for outstanding customer service,” said JD.com president of international Winston Cheng. “We look forward to working with Tiki to deliver a truly world class e-commerce experience to Vietnamese consumers.”

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Tencent and JD.com invest $863M into e-commerce firm Vipshop to battle Alibaba

Tencent, the internet giant that recently became Asia’s first $500 billion company, is continuing its investment spree after it agreed to buy $604 million in shares of Chinese online retailer Vipshop.

The deal is being made with long-time partner JD.com, which will invest $259 million into Vipshop, which is listed on the New York Stock Exchange. That takes the total between the two to $863 million.

The duo are paying a 55 percent premium for the stock, which will give Tencent a seven percent share and JD.com a 5.5 percent share in Vipshop. The investments will also allow each firm to appoint a board member based on shareholding terms following a two-year lock-up period.

Vipshop is best-known as an online discount retailer for brands, with a particular focus on the fashion space. It went public in a lackluster 2012 listing, but it is seen as a strategic ally for Tencent and JD.com in their ongoing battle to rival Alibaba, which is China’s largest e-commerce firm by some margin and has had an incredible financial performance this year. That was the same rationale for Tencent’s investment in JD.com in 2014 — the company is the closest direct rival to Alibaba — and it doubled down to become its leading investor last year.

Together, Tencent and JD.com have worked on frontier investments — particularly in Southeast Asia where both have backed Uber rival Go-Jek, and JD.com has done other deals in Indonesia and Thailand — but now they are converging again to boost their position on fashion e-commerce.

The investments in Vipshop will also be matched with strategic alliances. Tencent will help Vipshop into the wallet section on Weixin — the Chinese version of its popular WeChat app — while it JD.com will grant the company a prominent position on its main page and within its Weixin ‘mobile store.’ JD.com said it will also “assist Vipshop in achieving certain GMV targets” through its e-commerce platform.

“We look forward to providing Vipshop with our audiences, marketing solutions, and payment support to help the company provide branded apparel and other product categories to China’s rising middle class,” Tencent President Martin Lau said in a statement.

“We already see substantial demand from our users to discover, discuss and purchase branded apparel in our applications, and we believe that connecting our users more deeply to products on Vipshop’s platform will enrich their online experiences while benefiting Vipshop,” Lau added.

The deal is a continuation of a busy period of investment in 2017 for Tencent. The firm put money into three prominent global consumer companies Tesla, Snap, and Spotify, while also backing India-based unicorns Flipkartmessaging app Hikehealth portal Practo and Uber rival Ola. Other earlier-stage deals include flying cars, lunar drones and asteroid mining, while longer-standing investments like Sogou (search), Sea (games) and China Literature (e-publishing) have gone public in recent months.

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China’s JD partners with accelerator program Plug and Play to reach US startups

E-commerce giant JD.com, the closest rival to Alibaba in China, is broadening its presence in Silicon Valley after it announced a collaboration with accelerator firm Plug and Play to seek out and work with promising U.S. startups.

The e-commerce giant said it will share technologies, including AI, cloud and smart supply chain tech, with the program generally and work together to launch a new cohort that taps into its extensive presence in China.

The new JD-backed program will be open to startups that cover “a range of areas and industries,” with a particular interest in those that operate in common areas such as robotics, AI, AR/VR and the cloud. Plug and Play will control the selection, with JD on hand to offer expertise, mentorship, technology and more. There will also be opportunities to tap into its network and sell products directly to Chinese consumers via its services, which processed a total of 658.2 billion RMB — or around $100 billion — in GMV during 2016.

JD listed on the Nasdaq in 2014 and today its market cap currently stands at $53 billion. The company opened its first Silicon Valley office in 2015 which is focused on R&D. This year, JD has increased its investment focus outside of China considerably, particularly in Southeast Asia where it has backed Go-Jek, Pomelo and Traveloka, and it is also keeping an eye on the early-stage scene in the U.S..

“JD believes that innovation should not only benefit new businesses, but also support traditional industries compete in today’s environment, and we look forward to identifying and partnering with like-minded startups in the US. Partnering with Plug and Play, we hope to unlock the potential of the next generation of companies, and help them succeed both in the US and China,” JD’s chief strategy office Dr. Jianwen Liao told TechCrunch in a statement.

The deal sees Plug and Play welcome its first partner from China. Earlier this year the Sunnyvale-based company announced a major expansion to launch nine new cohorts that cover verticals including fintech, food and beverage, IOT and mobility. Unlike its peers in the U.S., such as Y Combinator, Plug and Play has expanded overseas and its global presence includes locations as diverse as Brazil, Germany, Russia, Singapore, Spain and Canada.

“Partnering with JD.com, one of China’s premier technology players, will give startups access to both tremendous innovation resources, as well as a huge helping hand as they look to reach the Chinese market,” added Plug and Play CEO and founder Saeed Amidi.

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Tech’s favorite royal — Prince Alwaleed bin Talal — has been arrested in Saudi Arabia

In a move sure to shock the business world, Saudi Arabia last night announced the arrest of at least eleven princes, including renowned billionaire investor Prince Alwaleed bin Talal, as part of a sweeping corruption investigation.

Prince Alwaleed controls the investment firm Kingdom Holding and is one of the world’s richest men, owning or having owned major in satellite TV networks, as well as in News Corp. (a stake it has since mostly sold), Citigroup (shares of which it has owned since 1991), and a growing number of tech companies.

The prince and Kingdom Holding, of which he owns 95 percent, first invested $300 million in Twitter in 2011, two years before the company went public. In 2015, he invested another $50 million to increase his ownership in Twitter and, as of last year, remained one of the company’s largest shareholders.

In 2013, Kingdom also acquired 2.5 percent of China-based retailer JD.Com, which went public on the Nasdaq the following year and whose shares have roughly doubled since.

Prince Alwaleed and Kingdom further acquired a stake in the car-hailing company Lyft early last year, buying some of the shares of its earlier investors Andreessen Horowitz and Founders Fund.

The prince and his other members of his investment company also announced in March 2015 that they’d sat down with Snap CEO Evan Spiegel and the company’s chief strategy officer, Imran Khan, in 2015 about a possible investment in the company, though several months later, a source close to the prince said Kingdom had no plans to invest.

In an unexpected twist, beleaguered condiments maker Hampton Creek said it restocked its board last month after its former directors left, and Prince Alaweed is reportedly among its new board members. It isn’t clear whether the prince has provided Hampton Creek with any funding. Bloomberg noted in a report that the prince is a animal rights activist. Hampton Creek makes a vegan mayonnaise and is said to be working on lab-grown meat.

According to the New Time Times, the arrests appear to be a move to consolidate the power of Crown Prince Mohammed bin Salman, a son and the top adviser of King Salman, who had announced the creation of a new anti-corruption committee — headed by the crown prince —  just hours before the arrests were ordered.

According to the Times, the Ritz Carlton in Riyadh was subsequently evacuated, possibly to house the arrested royals, and the airport for private planes shuttered, presumably to stop anyone from trying to flee the country.

Last year, the prince joined a number of other billionaires in signing up for the “Giving Pledge of Bill Gates and Warren Buffett; among others to sign up at the time were Salesforce CEO Mark Benioff; the three cofounders of Airbnb (Brian Chesky, Joe Gebbia and Nathan Blecharczyk); and Intuit founder Scott Cook.

As the Times notes, it’s unclear whether Saudi Arabia’s corruption committee might seek to confiscate any of Prince Alwaleed’s assets, estimated to be $32 billion.

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