E-commerce giant Alibaba Group HoldingLtd is said to have invested $1.25 billion in ele.me,becoming the biggest shareholder of the food delivery app lication.
According to a report from caixin.com on Friday, the two parties have already reached anagreement but the deal is expected to be completed after China's Spring Festival in February2016.
The investment is expected to give Alibaba about a 30 percent stake in ele.me. Ele.me, whichannounced its latest fundraising of $630 million in August, is expected to see its estimated valueboost to $4.5 billion after Alibaba's cash injection.
Both Alibaba and ele.me, when reached by China Daily on Friday, said they could not commenton market speculation.
Analysts said that it is important for ele.me to land investment as the online food delivery marketin China requires cash-burning competition to gain market share. The deal is also able to helpAlibaba gain a stronger foothold in China's online-to-offline dining market.
Ele.me, which was launched in Shanghai in 2009, is a major player in China's booming onlinefood delivery market. According to a report released by iResearch Consulting Group, the onlinefood delivery market, which had overall transactions of 9.51 billion yuan ($1.47 billion) in 2014,has huge potential in China.