BEIJING: Chinese online food delivery company Meituan-Dianping raised $4 billion dollars on Thursday from Chinese and foreign investors, amid a growing appetite to plow cash into the country’s tech start-ups.
The company, born of merger of two complimentary platforms in 2015, said it had raised money at an equity valuation of $30 billion, making it one of the largest startups in the world as valued by private investors.
Best described as a combination of Yelp, Grubhub and Groupon, the food delivery and review company says it has 280 million consumers buying on its platform annually and five million merchants. “Meituan-Dianping is leading a major transformation of China’s traditional services industry by creating a powerful new e-commerce ecosystem that covers customers’ whole day lifestyle scenarios,” Meituan-Dianping chief executive Wang Xing said in a statement.
China’s food delivery companies have spent heavily to bring users on to their platforms, discounting meals and offering consumers other rewards. But the high costs and hard nosed competition in the sector has cut into the profits.
In August, internet giant Baidu sold its food delivery arm — which was running at a loss — to Ele.me, which is primarily backed by another Chinese tech behemoth Alibaba. The move left China’s food delivery space with two main competitors: Ele.me and Meituan.
China’s social media and gaming giant Tencent has invested in both Ele.me and Meituan, and led the investment round announced on Thursday. The large series C round brought together a consortium of investors, including Sequoia Capital, GIC, Canada Pension Plan Investment Board and others.