- Chinese delivery service Cainiao raises funds for expansion
- Cainiao envisions daily delivery ability of 200 million
Alibaba Group Holding Ltd.’s delivery affiliate attracted investments from Malaysia and Singapore, including Temasek Holdings Pte, in its first round of external fundraising since its creation in 2013.
Zhejiang Cainiao Supply Chain Management Co. also gained funding from GIC Pte. and Khazanah Nasional Bhd to bankroll its expansion, according to an e-mailed statement on Monday. The company didn’t specify the amount raised or its valuation.
Cainiao, which has grown as Alibaba developed a dominant position in Chinese e-commerce, handles more than 70 percent of the nation’s express packages with its network set to span 2,800 county districts inside the country and 224 countries and regions globally by March. The company is angling toward a public offering to bankroll its expansion, as its Chief Executive Officer Tong Wenhong envisions the ability to support daily package deliveries of 200 million.
“If e-commerce was the focus of China’s economy in the past 10 years, logistics will be the focus for the next 10,” Tong said in the statement.
The delivery network is valued at about 50 billion yuan ($7.7 billion) in this funding round, Caixin reported citing people familiar with the matter. Alibaba declined to comment in an e-mailed statement.
Cainiao has previously said its network expansion could reach the U.S., Russia, Brazil and Spain to complement existing bases in seven countries, including Amazon.com Inc.’s home turf.
Alibaba created Cainiao with department store chain Intime Retail Group Co. and industrial conglomerate Fosun International Ltd. Alibaba owned 48 percent of Cainiao at the time.
Cainiao had 700 employees as of June last year. The company runs its own warehouses while also operating as a network overseer, using software to marshal trucking, shipping and delivery firms to get packages from seller to buyer.