Alibaba is set to invest $1.25 billion USD into China’s most heavily funded online food delivery service, Ele.me, according to a report from local business weekly, Caixin, on Friday
Alibaba will become the company’s biggest shareholder, taking on a 27.7 percent stake, according to unnamed sources cited by the report.
The potential deal would cap off a year of high-stakes investment in the on-demand industry for Alibaba. It’s also the latest merger of interests between Alibaba and long-time rival Tencent. The gaming and social giant contributed to a $350 million USD injection into Ele.me, announced this August.
Ele.me is one of China’s most highly-touted unicorns, reaching an estimated valuation of over $3 billion USD following their August funding round.
The company received a major boost in May 2014 when leading on-demand service Dianping invested $80 million USD into the company, sharing merchant data and ordering services. Dianping has since merged with Meituan, forming another investment alliance between Alibaba and Tencent.
It’s not the only Ali-Tencent coalition that Ele.me has been strategically linked with. In November Ele.me CEO Zhang Xuhao confirmed to Chinese press that they had agreed on a “strategic program” with leading ride-hailing service Didi Kuaidi to roll out an Uber Eats-style service. Tencent-backed Didi and Ali-backed Kuaidi merged in early 2015, ending one of the country’s biggest on-demand rivalries.