2015 was a big year for consolidation in China’s tech scene, and the latest deal between two of the country’s biggest fashion e-commerce platforms shows that mergers still haven’t gone out of style.
Mogujie.com, the $1.7 billion USD social shopping startup, will take control of rival Meilishuo.com through a stock swap, according to unnamed sources who spoke to the Wall Street Journal.
Tencent Holdings Ltd., who previously invested in Meilishuo, will remain a strategic investor following the takeover.
Hangzhou-based Mogujie, founded in 2011 by a former Alibaba engineer, began as is an image sharing site similar to Pinterest or Tumblr. The company later expanded into fashion e-commerce, collecting commission on the platform’s merchants.
The company raised a $200 million USD round in November led by Ping An Ventures, the VC arm of Chinese insurance giant Ping An Insurance Co. Other notable investors in Mogujie’s previous rounds include Hillhouse Capital, Banyan Capital, Bertelsmann Asia and IDG Capital Partners.
The deal is the latest in a long line of mergers and acquisitions in China tech, fueled by increasingly cautious sentiment among investors. Startups within the county’s ecosystem have spent heavily to square off market share, though turmoil in Asian stock markets and increasing competition has led to a number of record breaking mergers within the sector.
In October group buying giants Meituan and Dianping merged to form an entity worth over $15 billion USD. 2015 also saw massive mergers between classified sites 58.com and Ganji, as well as ride-hailing services Didi Dache and Kuaidi Didi.
Prior to the takeover from Mogujie, Meilishuo had reportedly been seeking to raise a new round worth several hundred million USD, but had been unsuccessful before the merger.