SoftBank’s Vision Fund to invest in Alibaba’s food delivery service: report

SoftBank Vision Fund plans to lead an investment of $3 billion to $5 billion into Ele.me, the food delivery giant owned by Alibaba Group Holding Ltd., Bloomberg reported citing sources familiar with the matter.

The nearly-$100 billion fund, backed by Saudi Arabia’s Public Investment Fund (PIF), is heading up discussions with potential investors including venture capital firms.

As part of the agreement, Alibaba intends to merge Ele.me with in-house arm Koubei, which focuses on connecting restaurants to the internet, sources said.

While it’s unclear how big a stake is available in Ele.me, which was valued at $9.5 billion in Alibaba’s April acquisition, investors get a piece of a company that’s said to be a candidate for an initial public offering.

The investment will come from the SoftBank Vision Fund, created to channel investments into some of the world’s most influential companies in an effort to stake out a dominant position in future technologies.

According to data compiled by Argaa, in October 2016, PIF and SoftBank signed a non-binding memorandum of understanding to set up the technology fund.

SoftBank has injected $25 billion in SoftBank Vision Fund, while PIF has pledged to invest $45 billion over five years.