One of China’s leading food delivery startups ele.me is about to receive US$ 1 billion funding from Alibaba and its financial affiliate, Ant Financial. This is the second largest startup funding in China this year after the US$5.5 billion raised by ride-sharing company Didi Chuxing.

The funding marks a new step in the ongoing rivalry between  Alibaba and Tencent which is backing ele.me’s competitor Meituan Dianping. Last year in April, Alibaba and Ant Financial completed a US$  1.25 billion investment in the company, making Alibaba their biggest shareholder and diluting Tencent’s own share at the same time.

The newest investment is not just another sign of the booming  O2O industry in China. By forming closer ties with food-delivery startups, Alibaba and Tencent hope to further boost their payment services Alipay and WeChat Pay.

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Masha Borak

Masha Borak is a technology reporter based in Beijing. Write to her at masha.borak [at] technode.com. Pitches with the word "disruptive" will be ignored. Read a good book - learn some more adjectives.