Alibaba, a Chinese ecommerce giant worth $198 billion (£139 billion), has invested $900 million (£636 million) into a food delivery company called Ele.me, according to TechCrunch. Ele.me received an additional $125 million (£88 million) from Ant Financial, a financial affiliate company of Alibaba.
The latest private equity funding round brings total funding in Ele.me up to $2.34 billion (£1.65 billion).
Founded in 2008, Ele.me is a Shanghai-based company that allows people to order takeaways from restaurants that don’t typically deliver.
It is one of the many startups operating in the new on-demand food delivery market. Others include Deliveroo, JustEat, Take Eat Easy, Hungry House, and Delivery Hero.
Analyst firm Edison Investment Research warned in March that many food delivery startups are “crashing” because they have been “so focused on obtaining huge network scale that they forgot the basics of economics.”
Edison Investment Research believes the single biggest problem facing startups specialising in on-demand food delivery and valet parking is the cost of labour in the developed markets they’re going after.