CICC, COFCO Said To Invest $2B In JD Finance At $26B Valuation

Chinese investment banking firm China International Capital Corporation Limited (CICC) and China National Cereals, Oils and Foodstuffs Corporation (COFCO) are in talks to lead a RMB13 billion (US$2 billion) round in Chinese e-commerce giant Inc.’s financial services spin-out, JD Finance, according to China Securities Journal, a Xinhua News Agency-controlled newspaper.

CICC, COFCO and did not immediately respond to China Money Network’s emails seeking comments.

The deal will be inked in the end of this month and the financing round will value JD Finance at RMB165 billion (US$26.1 billion) to RMB190 billion (US$30 billion), according to China Securities Journal citing sources familiar with the matter.

The proceeds will be used to purchase financial licenses and for research and development, as well as market development.

JD Finance booked revenues of RMB10.3 billion (US$1.6 billion) last year, with a 132.13% growth compared to 2016. Among its four business lines, financial service accounted for 51% of the revenues, payment business, logistics finance and wealth management accounted for 15.49%, 14.52% and 11.91% respectively, according to local media.

JD Finance raised RMB6.65 billion (US$1 billion) from Sequoia Capital China, China Harvest Investments and China Taiping Insurance in 2016.

In October, JD Finance hired Bo Liefeng, former principal research scientist at Inc., as chief scientist of its artificial intelligence lab. While at Amazon, Bo served as principal research scientist leading the team engaged in algorithm research for cashier-free stores Amazon Go.

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