Meituan-Dianping submitted the file for its Initial Public Offering (IPO) to Hong Kong stock exchange on June 22, targeting to raise $6 billion in funds. It will compete with the incoming IPO of Xiaomi in scale with a funding target of $6.1 billion.
As the world’s fourth most valuable startup currently valued at $30 billion, Meituan-Dianping does not have the dual list like Xiaomi, at third place in terms of value ranking. Xiaomi also announced its IPO plans in Hong Kong while delaying the issuance of Chinese Depository Receipt (CDR) in mainland China.
All of Meituan’s co-sponsors are foreign capitals such as Goldman Sachs, Morgan Stanley and Bank of America Merrill Lynch (MER).
Meituan-Dianping is a leading e-commerce platform that provides various services ranging from food-delivery to group-buying and to retail services. Earlier in April this year, after the acquisition of Mobike at $2.7 billion, Meituan also entered into the car-hailing industry to compete with Didi Chuxing, the ride-hailing giant in China. Meituan has almost fully realized an “O2O”(Online to Offline) business model covering all aspects of consumers daily life.
Meituan-Dianping has taken up more than half of the Chinese market share in 2017. Till Q1 in 2018, the share has reached 59.1 percent, completing more than 21 million deals per day.
According to the prospectus, Meituan-Dianping handled $57 billion worth of transactions last year from approximately 320 million active buyers. The average number of daily transactions between users has also increased from 10.4 in 2015 to 18.8 in 2017 – a growth of over 80 percent within three years. The operating revenue of Meituan has reached 40 billion yuan, this is almost sevenfold in three years.
The cooperative commercial partners of Meituan-Dianping has increased from 3 million in 2015 to 5.5 million in 2017. Meanwhile, Meituan-Dianping has invested a lot in the big data and AI technology development to improve efficiency and reduce cost of logistics.
The new funding will be used for its global expansion and other strategic plans in various industries, including food delivery, ride hailing, bike-sharing and payments.