Morning Report: Google and China’s e-commerce platform JD.com have struck a $550 million partnership.
Early on Monday morning, Google announced that it will invest $550 million in JD.com. The China-based e-commerce company operates as a business-to-consumer platform which competes with China’s e-commerce giant Alibaba’s Tmall.
Google will receive just over 27.1 million newly-issued JD.com Class A shares at an issue price of $20.29 per share. According to the announcement, this is equivalent to $40.58 per share of JD’s publicly-traded stock, based on its weighted average over the past ten trading sessions.
The two companies expect to collaborate on “a range of strategic initiatives,” which combine Google’s technology advantages with JD’s depth of experience in supply chain and logistics.
JD.com was launched in 2004 and raised nearly $1 billion in funding before listing on the NASDAQ in May 2014. The company has entered into various strategic partnerships with Chinese and U.S. companies, alike. Notably, the company first forged a partnership with Walmart in June 2016, as it bought Walmart’s e-commerce division in China, Yihaodian, giving Walmart a 5 percent stake in JD.com.
Adding another layer to the story, in March 2014, Tencent purchased a 15 percent stake in JD.com. The integration of JD.com with Tencent’s WeChat allowed both companies an advantage in their competition with Alibaba, particularly in China’s mobile e-commerce space.
Reuters notes that the investment is indicative of Google’s broader ambition to increase investments in Asia. According to Crunchbase, Google and various branches of its parent organization, Alphabet, have invested in numerous Asia-based companies in 2018 alone, including India’s online-to-offline fashion startup Fynd, China’s streaming platform Chushou, and Indonesia’s Go-Jek.
Google’s investment in JD.com gives JD a strong U.S.-based partnership to leverage in its global competition with Alibaba.
From The Crunchbase Daily:
- Google is investing $550 million in Chinese e-commerce giant JD.com. The two tech companies also plan a broader partnership including promoting items on Google’s shopping channels and working to expand JD’s international footprint.
- Microsoft is acquiring Flipgrid, the developer of a popular video discussion platform used by educators and students, for an undisclosed sum. Minneapolis-based Flipgrid previously raised about $17 million in venture funding.
- Crunchbase News takes a look at the rising number of fintech startups developing tools and services that could provide small merchants an alternative to the often costly transaction fees that accompany credit card purchases.
Illustration Credit: Li Anne Dias
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