Alibaba's Investment In Koubei Is Turning Heads, But What Is Koubei?
Alibaba Group Holding Ltd (NYSE: BABA) is looking to raise approximately $1 billion for its Koubei expansion, a local service platform. This puts the valuation of the venture close to $8 billion and indicates that the Chinese firm's investment is making its worth.
Koubei is a company engaged in online orders meant for offline services like delivery of food and beverages to the users of the local-services platform, according to a Wall Street Journal report. Until now, Alibaba's Ant Financial Services Group funded the venture and it is now looking for outsiders' investment.
Initially, Koubei focused on delivering food and beverages. However, the company is now looking to expand its offline services to online consumers by enabling merchants to have their virtual stores on Koubei platform.
Though the venture has witnessed a rapid growth with $5 billion in payments in the June quarter representing a quarter-over-quarter growth of 48 percent, it suffered a loss of $37 million.
In the wake of smartphone apps growth, Chinese internet firms have been expanding their services. Alibaba has been compelled to focus on local services platform after Meituan, a largest restaurant bookings and movie tickets seller, favored merger with Tencent Holdings Ltd (OTC: TCEHY).
Alibaba shares traded at $104.15, up $1.31, or 1.52 percent, in the pre-market trading.
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