JD.com, the Chinese e-commerce giant that is Alibaba’s closest rival, is raising giving its logistics spin-out business a huge boost after it announced that the unit is raising $2.5 billion.
JD Logistics, which became a standalone business last April, is raising the investment capital from a range of backers who include Hillhouse Capital, Sequoia China, China Merchants Group, Tencent, China Life, China Development Bank Capital FOF, China Structural Reform Fund and ICBC International, according to a press release announced today.
JD.com confirmed it will remain the majority shareholder with a stake of 81.4 percent. The transaction, which is JD Logistics’ first outside funding event, gives the division a valuation of around $13.5 billion.
It may sound unconventional to spin out division into standalone businesses, but it is fairly common among China’s top tech firms. JD.com itself span out its financial services arm and that business raised just over $1 billion last year. Indeed, Sequoia China participated in funding for both JD.com spin-outs.
Alibaba itself operates a range of affiliates, including $60 billion valued Ant Financial — which it is in process of acquiring one-third of — and a logistics unit called Cainaio.