The logistics division of JD.com, Alibaba’s closest e-commerce competitor in China, has raised 1.5 billion yuan (about $218 million) to invest in logistics-related companies and technology. Limited partners in the new fund include JD Logistics and JD.com, as well as undisclosed listed companies and government-led funds, reported Reuters.
A company spokesperson told TechCrunch that the fund will focus on smart logistics and smart supply chain technology.
JD Logistics, which became a standalone subsidiary in April 2017, has a lot to prove. The unit raised $2.5 billion last year from Hillhouse Capital Group, Sequoia Capital and Tencent, among other investors, in its first major outside funding at a valuation of about $13.5 billion and is also eyeing a potential public offering.
But two months ago, JD.com CEO Richard Liu said in an internal memo that JD Logistics would enact several cost-cutting measures after losing 2.8 billion yuan (about $420 million) last year. These include getting rid of a basic salary for its couriers and instead pay them based on how many packages they deliver. JD.com owns a 81.4 percent stake in the business.
JD Logistics competitors include Alibaba’s Cainiao, which raised undisclosed funding at a reported valuation of $7.7 billion in 2016. Ensuring speedy, cost-efficient deliveries is especially important to JD.com’s business because it carries its own inventory and performs both in-house logistics and service for third parties.