What happened: Alibaba has just recently formed a new overarching company for its food delivery platforms Ele.me and Koubei and already insiders are saying that the unit’s initial funding could exceed the amount its rival Meituan Dianping raised through its IPO. The unit received financing worth $3 billion from Alibaba and SoftBank and might raise even more while Meituan’s IPO raised $4 billion.
Why it’s important: Food delivery continues to be a major point of rivalry between Alibaba and Tencent-backed Meituan Dianping. A previous report from Reuters noted that Alibaba’s food delivery unit could raise up to $5 billion reaching a valuation of $25 billion. The food delivery industry can be seen not only as a proxy war for Alibaba’s and Tencent’s payment services but also a battle for supremacy in the more larger O2O industry. The value of O2O transactions in China jumped 72 percent last year to $146 billion, according to Chinese research firm Analysys.