RedMart Ltd's presence in Southeast Asia is expected to expand after Lazada Group, an online shopping company backed by China e-commerce titan Alibaba Group Holding, agreed to buy the Singapore online grocer.
Alibaba-backed Lazada, which sells goods from smartphones to baby products throughout the region of 600 million people, said in a statement that it will buy Redmart to benefit from its operational and technological capabilities.
Redmart, which was established in 2011, has its own fleet of delivery vans and offers daily home delivery of fresh produce and frozen foods.
A Wall Street Journal report cited sources familiar with the transaction as saying that the sale involved about $50 million.
RedMart postponed its plans to expand overseas in May after it encountered funding problems earlier this year. The company said on its website that its total funding is $27 million, after raising $23 million in a Series B funding in 2014. Its investors included SoftBank Group Corp, Vissionaire Venture, a San Francisco-based firm and Facebook co-founder Eduardo Saverin, among others.
Since its launch four years ago, Lazada has been pushing for its expansion in Southeast Asia. Alibaba said in April said it will pay about $1 billion to buy major shares in the company.
Lazada said in the statement that the acquisition is expected to be completed by the end of the year and RedMart will be allowed to operate independently even after the acquisition.
Hugh Mason, a co-founder of JFDI, the pioneer incubator in the region, said that many Southeast Asian tech startups fail to attract investors that will help fund them during the early stages since most investors from the region are more comfortable with traditional assets or established businesses.
Goldman Sachs Group Inc. and Credit Suisse Group AG served as advisors on the deal, the press release said.
Lazada operates and promotes online shopping in Southeast Asian countries such as Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam.