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Alibaba’s Hong Kong fund invests in three e-commerce startups

TechCrunch TechCrunch 6/05/2016 Jon Russell

Alibaba has broken the seal on its startup fund for Hong Kong after it backed its first three companies in undisclosed deals. The startups are unsurprisingly all in the e-commerce space: Yeechoo is online fashion store focused on renting not buying, Shopline helps online sellers use the internet for marketing, while GoGoVan is delivery and logistics on-demand.

Last November, Alibaba put $450 million into two standalone funds focused on early-stage investing in Hong Kong and Taiwan. These are the first deals for the Hong Kong fund — which is slightly smaller at $130 million and is managed by Gobi Ventures.

Both funds were designed to increase Alibaba’s reach in the startup space and, in particular, build its presence in early-stage deals. Sure, Alibaba is an active investor that has doled out billions to invest in or buy companies like Youku Tudou, Weibo, Magic Leap, and others, but these funds help it take a more strategic role.

GoGoVan provides rental vans and other logistics services on-demand to business customers in 13 cities across China, Hong Kong, India and beyond. The startup, which claims to have 150,000 drivers and processed 20 million orders to date, said the investment from Alibaba formed part of its Series C round. The company did not disclose the size of the round, but it did say it was lead by private investment fund New Horizon Capital, and that Singapore Press Holdings and Hotung Investment Holdings took part alongside Alibaba and existing investors.

Hong Kong-based GoGoVan previously raised a $6.5 million Series A in 2014 and a $10 million Series B last year, so we can assume that this Series C is in the tens of millions — which is interesting since Alibaba’s funds were very much marked as being for early-stage companies. (The fund is almost certainly a minority investor.)

Two-year-old GoGoVan’s competitors include Uber, which operates a similar service in Hong Kong, and Lalamove, which raised two separate$10 million funding rounds last year and is reportedly gearing up to raise $30 million more in 2016.

Shopline raised $1.6 million in February 2015 and is aimed at helping the legions of online sellers across Asia market themselves and their products better. Many of those target sellers use Alibaba’s services or Lazada, the e-commerce firm in Southeast Asia that Alibaba recently invested in, so there are plenty of synergies.

The startup said it has over 60,000 merchants on its platform, with Hong Long and Taiwan particularly strong countries.

“In one year, [the] business has grown five-fold with two offices now in Hong Kong and Taipei. This new funding will be used for team expansion, product development and customer acquisition. We are aiming for profitability and actively assessing our next market,” Shopline co-founder and CEO Tony Wong said in a statement.

Yeechoo, meanwhile, is a more stealthy company which believes that “experience is the new ownership” for fashion. In other words, why buy clothes when you can rent them. Its customers can pick out items to borrow for four to eight days from a selection of over 150 brands. The idea is to keep your closet fresh and variable while trying new ideas and items before you buy for good.

The company is planning to introduce a new subscription model that it claims will make it ‘the cloud closet for everyone.’ It’s a pretty bold idea, and a good early bet for Alibaba’s fund.

Alibaba said the Hong Kong fund had received more than 200 applications for investment following its announcement late last year. “The fund will continue to look for promising entrepreneurs and engaging them through discussion of their business plans,” it added in a statement.

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