Meituan-Dianping rumored to raise up to $5 billion in funding

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Meituan-Dianping may soon raise its value to $25-30 billion with a new round of fund raising worth between $3 and 5 billion, according to unknown sources cited by Bloomberg. Meituan’s long-time backer Tencent is said to be participating in the round, the report says.

The new funding means that Meituan-Dianping could be upping its game in conquering China’s offline to online (O2O) market. Meituan-Dianping covers a wide array of O2O services, including its core businesses food delivery and group buy. Among its other services ticket booking, ride-hailing, micro-loans, and homestay.

Last week, Meituan-Dianping announced that it plans to be “the most aggressive investor in the offline retail space.” By entering “new retail”, the company has challenged China’s two e-commerce giants Alibaba and JD in their own playing field. Meituan-Dianping has stated that it plans to rely on more than $3 billion remaining from a $3.3 billion funding round in early 2016 to set up an infrastructure for services including offline retail.

New funding could also mean that Meituan will take a more aggressive stance towards its food delivery competitors, such as Alibaba-backed food delivery services Koubei and Ele.me. In June, Ele.me announced that it will receive $1 billion funding from Alibaba and its financial affiliate, Ant Financial. The increasingly competitive food delivery business means that smaller companies may be forced out. According to new reports, Baidu’s delivery service Waimai may soon merge with Ele.me.

Meituan-Dianping has so far issued no statement regarding rumors of its newest fund raising.