JD.com will invest $350 million – purchasing shares at $5.33 each – and the deal will see it become the largest shareholder in the travel website at 27.5 per cent. The other investors in the round include, affiliates of Ctrip, DCM, Hony Capital, Sequoia and Singapore state fund Temasek Holdings.
“As part of the agreements, JD.com Inc. will purchase a total of $350 million newly issued Class A ordinary shares of Tuniu through a combination of $250 million in cash and $100 million in resources as part of the two companies’ jointly announced strategic agreement. In addition, Unicorn Riches Limited, an affiliate of Hony Capital; DCM Ventures China Turbo Fund, LP and DCM Ventures China Turbo Affiliates Fund LP, both affiliates of DCM V LP; Ctrip Investment Holding Ltd., a subsidiary of Ctrip.com International, Ltd; Esta Investments Pte Ltd, an affiliate of Temasek Holdings; and Sequoia Capital 2010 CV Holdco Ltd, an affiliate of Sequoia Capital, will purchase $80 million, $20 million, $20 million, $20 million and $10 million of newly issued Class A ordinary shares, respectively,” Tuniu said in a statement.
All investors have also agreed not to sell, transfer or dispose of any shares acquired in the transaction for six months after the closing, its statement added.
This marks the second time that JD.com is leading a financing round in Tuniu. In December 2014, it had led the round where Chinese travel website had raised $148 million from a consortium of investors
The deal will also see Tuniu be the exclusive provider of travel products and services on JD’s website. Put simply, it will operate the travel part of the e-commerce business of JD.com without paying any commission to the latter
Donald Yu, Tuniu co-founder and chief executive, said: “As the exclusive operator of JD.com’s leisure travel channel, we will collaborate with JD.com by leveraging its traffic and customer base to provide superior leisure travel products and the best customer experience. In the future, we will further increase Tuniu’s investments to improve the user experience of our travel products, promote our brand, expand our regional service centers, strengthen our supply chain management and advance our research and development efforts in order to solidify our market leadership position.”