Alibaba Group Holding Ltd. and its financial services affiliate Ant Financial plan to lead a US$1 billion funding round in Ele.me, a Chinese food ordering mobile app, which will value the start-up at US$5.5 billion to US$6 billion post-money, according to media reports citing insiders.
Alibaba did not respond immediately to an inquiry from China Money Network to confirm the information.
Last April, Alibaba and Ant Financial also made a US$1.25 billion round in the start-up, which made Alibaba the biggest shareholder of the company, with a 27.7% stake.
In December, Ele.me reportedly missed key performance metrics, including market share and revenue targets and the timing of an IPO, that were agreed on when Alibaba invested in the company, which could result in Alibaba taking control of Ele.me. Ele.me later denied the news.
Founded in 2009, Ele.me is an online food-delivery company in China, controlling about a third of the market in 2015, according to Analysys International.
In 2016, the online-to-offline on-demand sector, including online food ordering and home services, is estimated to have reached RMB1.1 trillion (US$160 billion), up 25.5% year-on-year.
Ele.me previously raised eight investment rounds from investors including CITIC Private Equity Funds Management Co., Beijing Hualian Department Store Co., Ltd., CMC Capital, Gopher Assets, Tencent Holdings Limited, JD.com Inc., Sequoia Capital, GSR Ventures, Matrix Partners China and Dianping.com.