Meituan-Dianping in Talks with Banks for HK IPO, Piling up Cash to Challenge Didi Chuxing Monopoly

The company is reportedly seeking a $60 valuation and a duo-listing in Hong Kong and China.

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Meituan-Dianping, the world’s largest O2O e-commerce platform, is in talks with three underwriters, Bank of America Merrill Lynch, Goldman Sachs, and Morgan Stanley, to prepare for a floating in Hong Kong, sources familiar with the matter told Reuters. The potential listing is going to pile up its war chest, as the Beijing-based company has just ignited a cash-burning war against China’s largest ride-hailer Didi Chuxing.

Bloomberg, citing sources, said in another story that Meituan-Dianping is seeking a valuation over $60 billion and is mulling a duo listing in China if Beijing nods its head. The company raised $4 billion in last October at a valuation of $30 billion.

Shareholders in Meituan-Dianping will benefit from the bull market of technology stocks, according to Reuters’ sources. Current investors in Meituan-Dianping include Tencent, Sequoia Capital, Priceline Group and GIC.

Incorporated after a merger between group-buying platform Meituan and restaurant review website Dianping in 2015, Meituan-Dianping is now the world’s #4 most valuable startup according to CB Insights, and also the world’s largest O2O e-commerce platform. Founder and CEO WANG Xing, revealed earlier this year in an email to his employees that Meituan-Dianping has 320 million active users, that’s one in every four Chinese.

Image credit to Meituan Waimai’s Weibo account.

Meituan-Dianping’s e-commerce platform provides everything from restaurant and travel booking, movie ticketing to food delivery. In the same email, WANG claimed his company has doubled its revenue in 2017 to top RMB 33 billion (approx. $ 5.3 billion) and its GMV was over RMB 360 billion (approx. $ 57.3 billion).

According to app analytic service QuestMobile, as of last year-end the Meituan app and the Dianping app enjoys a combined MAU of almost 300,000 million and an aggregated market share of nearly 30% in China’s lifestyle app sector.

The e-commerce major is making new enemies on many fronts as it keeps expanding its business scope. In takeaway delivery, one of its core businesses, Meituan-Dianping is competing with Alibaba-backed Ele.me.

Recently, Meituan-Dianping ignited a war with Didi Chuxing the monopoly in Chinese ride-hailing sector. Just like elsewhere in the Asian market, ride-hailing is a highly capital-driven industry and Meituan-Dianping claimed it plans to spend over RMB 1 billion (approx. $ 159.2 million) to tap into that market. A potential floating would bolster Meituan-Dianping’s cash pile and better prepare it for to a protracted fight with Didi Chuxing.

Read more: 

Is Meituan-Dianping Posing Serious Threat to Didi?

Meituan-Dianping Encroaches on Didi Chuxing by Launching Ride-Hailing Service in Shanghai

Editor: Ben Jiang