Alibaba’s Cainiao Logistics Confirms First Financing At $7.7B Valuation

Mar 15, 2016

1 min read

Alibaba-backed logistics company Cainiao has sealed their first-ever funding round from a consortium including Singapore’s Temasek Holdings and GIC Pte Ltd, Malaysia’s Khazanah Nasional Bhd, and China’s Primavera Capital, according to the Chinese e-commerce giant.

Alibaba did not disclose the size of this financing round. Local finance media Caixin reported the round is over 10 billion yuan ($1.54 billion) at a 50 billion yuan ($7.7 billion USD) valuation. Technode reached out to Alibaba to verify these figures, but the spokesperson declined to comment on funding details.

The involvement of foreign investors may underline the company’s overseas expansion plans.

Cainiao was founded in 2013 by a group of investors including Alibaba, investment institution Fosun and department chain store Yin Tai, Forchn Holdings Group, and leading Chinese delivery companies (S.F. Express, ZTO Express, YTO Express, STO Express and Yunda Express).

Unlike Amazon or JD, Alibaba’s e-ecommerce marketplaces don’t offer delivery services before the establishment of Cainiao. Small merchants on the platform have to use third-party delivery services. Cainiao was formed to fill this gap.

Cainao’s ecosystem consists of five main parts including delivery, warehouses, distribution centers, cross-border delivery, and courier services for rural areas, according to a statement from the company. The system now claims to have 128 warehouses and 180,000 express delivery stations in China. As of March this year, the service has covered 224 countries and regions, 2,800 county-level cities in China.

Through partnerships with couriers and warehouse service providers, the platform handles more than 70% of the parcels in China, boasting over 1.7 million delivery person on the platform, the firm added.

Cainiao is not the only delivery service that Alibaba holds shares in. The e-commerce titan has taken a stake in the logistic arm of Haier, a leading home appliance company in China, YTO Express and Singaporean logistics company SingPost.

The new funding will help Cainiao build a more efficient delivery platform, which will in turn pose stiffer competition to JD, Alibaba’s major rival in China, known for their quick and reliable deliveries.