IPO | Tencent-backed Meilishuo files for $500m US public float at $4B valuation

Meili Inc takes a step forward towards its pre-profit US listing dream.

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Tencent-backed online fashion retailer Meili Inc submitted its prospectus to the US Securities and Exchange Commission (SEC) on July 19, with the aim of raising US$500 million in a US public float with an estimated valuation of $4 billion, according to people familiar with the matter. Based on earlier media reports on its intended IPO, Meili Inc looks set to be on target for an IPO in H2 2018.

While the Hong Kong bourse has been attracting many Chinese tech companies looking to conduct an initial public offer (IPO) since  adopting a  dual-listing policy change, Meili is conducting its IPO as a pre-profit tech stock, with the perception that US investors are more familiar with its Chinese e-commerce model on the basis of predecessors such as Alibaba Group Holding and JD.Com Inc.

This Chinese women-focused fashion online retailer’s imminent initial public offering (IPO) is likely to be underwritten by Morgan Stanley, Credit Suisse, and China Renaissance, according to a report by Reuters. The startup counts Tencent Holdings Ltd., GGV Capital, Sequoia Capital China and BlueRun Ventures as backers of the company.

Founded in 2009, Meilishuo, which means beauty talk in Chinese, started out as an online marketplace and social site mainly targeting female customers. Mogujie, another online fashion retailer, on the other hand, started only about 2 years later. They have since both evolved into shopping sites similar to Alibaba’s Taobao, and have merged to form Meili Inc in 2016, at a valuation of around $3 billion.

Together, Meili Inc runs a number of portals, with a total of 200 million registered users and a daily active user (DAUs) of more than 15 million, as of early May. One such platform is mainly for internet celebrities and models. This e-commerce mobile app operator generally provides a female-fashion community, for female consumers to discover and purchase a wide plethora of fashion items from popular clothing. shoes, skincare products, handbags all the way to even accessories.

Statistics showed that 58.3 per cent of its users are aged between 23 to 30, with 75 per cent of its users having a family monthly income of between RMB 10,000 and RMB 20,000.

Meili Inc’s online fashion marketplace, which aims to blur the lines between social media and e-commerce, seems to be on the right track, making it a good fit to partner Tencent in its competition with Alibaba in the social commerce space.

Even as Alibaba takes a further step into social media – with the rumours of possible investments into Douyin – Meili Inc can look to expect more resources from Tencent even as it prepares for an imminent listing in the U.S

Editor: Shiwen Yap