Meituan-Dianping in Talks to Raise $3 Billion, Sources Say
Meituan-Dianping is in talks to raise $3 billion, Caixin has learned, paving the way for a potential initial public offering (IPO) in Hong Kong this year.
Two sources close to the matter told Caixin that China’s largest on-demand service provider is mulling a new round of fundraising, with one saying the $3 billion injection could further push up its valuation to $40 billion.
The move comes as Meituan-Dianping is aggressively shoring up its core food delivery business and expanding its nascent ride-hailing service, an area that the company will need huge funding to support, the second source said.
Responding to Caixin’s queries, a Meituan-Dianping spokesperson denied that the company has plans to start a new round of fundraising and declined to comment on its IPO timeframe.
The company is planning an IPO on Hong Kong’s stock exchange by the end of this year, although discussions on the matter are still at a preliminary stage, sources told Caixin earlier.
Meituan-Dianping was formed in 2015 after a merger of group-buying platform Meituan and restaurant-reviewing site Dianping. The company has since expanded into a wide range of on-demand services including ticket booking, food delivery and ride-hailing.
The company posted 33 billion yuan ($5.26 billion) in revenue last year, boasting 320 million active users and 4.4 million merchants.
In its last round of financing — led by technology giant Tencent Holdings Ltd. in October and worth $4 billion — Meituan-Dianping was valued at $30 billion, making it one of China’s most valuable tech unicorns, a term that describes startups valued at more than $1 billion.
The company recently rode into the car-hailing sector dominated by Didi Chuxing Technology Co. Ltd., and has already rolled out ride-sharing projects in Nanjing and Shanghai. It said it aims to expand into more than seven cities nationwide including Beijing.
Meituan-Dianping made headlines earlier this month when it announced it was acquiring one of the major bike-sharing players, Beijing Mobike Technology Co. Ltd., for $2.7 billion.
The unicorn also made its foray into overseas markets this year by investing in Indonesian ride-hailing startup Go-Jek and India’s biggest food delivery platform, Swiggy.
Contact reporter Jason Tan (firstname.lastname@example.org)
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