JD.com logistics arm raises US$2.5 billion for automation, drones, and robots

14/02/2018

JD.com is the ever-ready challenger to Alibaba’s e-commerce empire, but a new round of funding has injected it with impressive resources to expand at home and abroad. The company announced Wednesday that it raised US$2.5 billion for logistics, and plans to invest the funds in robotics, automation, and drones.

“JD Logistics will continue to support both JD.com’s e-commerce business and the logistical needs for a wide range of industries for years to come,” said Richard Liu, Chairman and CEO of JD.com. “Our decision early on to build out our own logistics network has paved the way for JD Logistics to become the industry leader it is today.”

JD.com is China’s second-largest e-commerce platform, and its logistics arm, JD Logistics, was worth US$10.9 billion before this latest funding round. Investors include Hillhouse Capital, Sequoia China, China Merchants Group, Tencent, China Life, China Development Bank Capital FOF, China Structural Reform Fund, and ICBC International, JD.com said in a statement.

JD.com will remain the majority shareholder of JD Logistics with an 81.4% stake. The company has an estimated value of US$11 billion.

The company has operated its own logistics system since 2007. and in Apr. 2017, turned its logistics arm into a separate business. Analysts suggest that this reorganization is to prepare for a 2018 IPO.

“Over the decade that we have built out our operations, initially to support our own e-commerce business, we have created the most efficient, integrated and user-friendly logistics network in China,” said CEO of JD logistics, Zhenhui Wang. “This financing will enable JD Logistics to further enhance its smart supply chain network with openness and integration. It is a major step, which will speed up our collaborative efforts with leading industry partners and build China’s next-generation commercial infrastructure ecosystem.”

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