SHANGHAI (Reuters) - Alibaba Group Holding Ltd (N:BABA) has agreed to invest $1.25 billion (837 million pounds) in Chinese online food delivery service Ele.me, leading business weekly Caixin reported on Friday.
The report, citing unidentified sources, said Alibaba will obtain a 27.7 percent stake in Ele.me, becoming its biggest shareholder.
Alibaba and Ele.me both declined to comment.
Ele.me, which roughly translates as 'Hungry Now?', is part of a trend in China for what is known as online-to-offline (O2O) services. These include taxi hailing and restaurant review apps that link smartphone users with offline businesses.
Earlier this year, the food delivery service firm raised $350 million from investors including CITIC Private Equity, Tencent Holdings Ltd (HK:0700), Alibaba rival JD.com Inc (O:JD), Dianping and Sequoia Capital.
As more Chinese use their phones for everything from shopping to booking restaurants, China's internet giants Alibaba, Tencent and Baidu Inc (O:BIDU) are increasingly investing in these services to attract more users to their own platforms.
Alibaba, the world's biggest e-commerce company, and social networking and video games titan Tencent together spent more than $8 billion last year alone backing sometimes strikingly similar ventures, such as taxi hailing apps Kuadi Dache and Didi Dache.