Alibaba has grown into a diversified conglomerate that encompasses several multi-billion dollar affiliates from Ant Financial and AliCloud to Cainiao Logistics. Yesterday, the e-commerce titan announced a 1.1 billion USD financing round for its local life commerce arm Koubei.

Investors include Silver Lake, CDH Investments, Yunfeng Capital, and Primavera Capital. Alibaba’s billionaire founder Jack Ma is one of the founders of Yunfeng Capital. It is interesting to note that the current round marks the first money from external investors.

Although the exact amount contributed by each investor wasn’t clear, Xie Fang, managing director of CDH Investment, confirmed with local media that this is their largest single investment in the TMT sector.

Koubei is a joint venture founded in 2015 by Alibaba and its mobile payment affiliate Ant Financial to tap into China’s rising O2O initiative. Fan Chi, CEO of Koubei, said they will continue to invest in data-supported services in a bid to let offline merchants enjoy the benefits brought by internet technologies.

At the same time, Koubei will cooperate with more third-party partners to create a local life ecosystem that includes all kinds of supports from platform, traffic, marketing, and supply chain.

After more than one year of development, Koubei has partnered with over 1.5 million offline merchants, recording daily orders of 15 million. The platform generated 73.1 RMB billion (10.5 billion USD) payment volume through Alipay during the fourth quarter of 2016, representing a 52 % increase over the prior quarter. It’s 2016 annual gross merchandise volume hit 173.1 billion RMB.

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Alibaba 2016 Q4 Fiscal Report

Despite the growth, Koubei is still recording losses. Alibaba’s quarterly loss attributed to Koubei is around 237 million RMB, according to the company’s fiscal report. Given that Alibaba and Ant Financial each hold half of the shares in Koubei, the quarterly loss of Koubei would stand at 474 million RMB. Alibaba and Ant Financial both put RMB 3 billion into Koubei when it was created.

The e-commerce giant pledged to have “aggressive growth” with Koubei after the funding as it fights competition from Meituan-Dianping, Baidu, and Ele.me.