Chinese ecommerce giant JD.com has raised $2.5 billion for its logistics subsidiary.
JD.com has been operating its self-owned logistics system since 2007 and established JD Logistics as a stand-alone subsidiary in April 2017.
- WHICH-50 Reader Survey: Help us improve Which-50 by taking our annual reader survey. You can also win prizes including Google Home, Google Home Mini, Kindle Paperwhite, Beats by Dre Headphones, or Philips Hue Smart Lights.
Investors in the raise include Tencent, Hillhouse Capital, Sequoia China, China Merchants Group, China Life, China Development Bank Capital FOF, China Structural Reform Fund and ICBC International.
After the completion of this transaction, JD.com will remain the majority shareholder of JD Logistics with an 81.4 per cent stake.
According to Reuters, JD Logistics was valued at $10.9 billion prior to the new funding.
“Our decision early on to build out our own logistics network has paved the way for JD Logistics to become the industry leader it is today. The shift throughout global ecommerce towards our model is vindication of the path we chose,” said Richard Liu, Chairman and CEO of JD.com.
The money will be used to support investments in automation.
“This current funding round sets the stage for us to further invest in expanding our lead in the sector in areas like automation, drones and robotics. JD Logistics will continue to support both JD.com’s ecommerce business and the logistical needs for a wide range of industries for years to come,” Liu said.
Currently JD.com owns and operates six major logistics networks, including normal-sized items, bulky items, cold chain, B2B, cross-border and crowd-sourced (New Dada), which the company says covers 99 per cent of China’s population.
JD.com recently announced it is opening an office in Melbourne this month to encourage Australian businesses to list their products on its Chinese online marketplace.