Chinese food delivery start-up Ele.me valued at US$3 billion after gobbling up US$630m in funding
A China-based food delivery platform has been valued at a staggering US$3 billion following a US$630 million financing round.
Citic Private Equity Funds Management and Beijing Hualian Group Investment led the Series F funding in Shanghai start-up Ele.me.
The deal also includes further investment from existing shareholders Tencent, JD.com and Sequoia Capital.
Founded in 2009 by students from Shanghai Jiatong University, Ele.me – "are you hungry?" in Chinese – is one of China's largest food ordering platforms with around 40 million users. It's turnover last year was 7 billion yuan (US$1.1 billion).
Online-to-offline food services are a hot market in China with a number of different companies competing to deliver everything from roast duck to pizza.
A recent report by Beijing-based consultancy Analysys International estimated that customers spent upwards of 12 billion yuan on food delivery platforms in the first half of 2015.
In January, Ele.me raised US$350 million in Series E funding lead by Tencent.
Daily transactions on the app top 60 million yuan (US$9.4 million) with 98 per cent of orders made on smartphones.
Most of the company’s business partners are small restaurants in first-tier cities like Beijing or Shanghai. The company has said it plans to improve its infrastructure to boost its delivery service.
Ele.me’s closest competitor, Meituan.com, China’s largest group buying site and a provider of food-delivery services, has seen a similar interest from investors, raising US$700 million in Series D funding in January.
Intense competition between Tencent-backed Ele.me and Alibaba-supported Meituan saw large discounts offered to pull in new customers in the latter half of 2014, including pizzas for as little as 1 yuan.