Ele.me, a food delivery service based in Shanghai, announced this afternoon (link via Google Translate) that it has raised $350 million in Series E funding from CITIC, Tencent, JD.com, Dianping.com, and Sequoia Capital.
The investment is notable because Tencent, e-commerce company JD.com, and restaurant review site Dianping.com are closely aligned. Investing in Ele.me, which operates throughout China, can potentially help all three businesses build their online-to-offline (O2O) strategies.
Alibaba and Baidu, Tencent’s main rivals, already have investments in food delivery services. Alibaba backs Meituan, while Baidu holds a majority stake in Nuomi. Both Meituan and Nuomi are group-buying sites that recently launched food delivery services.
In its announcement, Ele.me (which means “hungry yet?” in Chinese) said it will continue to operate independently. The company, which serves 250 cities, with 200,000 restaurants and 20 million users on its platform, said that in 2014 its total order volume reached 110 million renminbi, with 75 percent of orders made through its mobile apps.
O2O is an important market for companies like Tencent, Baidu, and Alibaba to tackle because it allows them to leverage their existing network of websites and mobile apps to bring users into traditional brick-and-mortar stores, therefore opening up more ways to make money.
Alibaba’s O2O plays include affiliate Alipay, China’s leading mobile payment services company, as well as promotions that its various online marketplaces run with brick-and-mortar retailers.
Tencent can potentially use Ele.me to power food delivery services on WeChat, China’s top messaging app. Several businesses, including Chengdu-based “Call A Chicken,” already use WeChat to connect with customers. Adding food delivery would add to the roster of services WeChat already offers in China, including the ability to hail taxis from Didi Dache, another Tencent investment.