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Meituan-Dianping raises $4B new fund, reflects heated proxy war of Tencent and Alibaba
Meituan-Dianping, China’s O2O and e-commerce platform, announced today that it has landed a $4 billion Series C round of financing led by Tencent.
With the newly pocketed funds, the firm is expected to further expand its four core businesses: in-store dining, entertainment, on-demand delivery, and travel. Meituan-Dianping has a large scale of offerings, including food delivery, group buying, hotel booking, and even movie ticket sale. Also, Meituan-Dianping provides a wide range of services in the O2O sector that continue to challenge Alibaba. With that being said, it’s fair to say that the latest funding round reflects a much more heated proxy battle between Tencent and Alibaba.
“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,” said Wang Xing, CEO of Meituan-Dianping, in a company statement. “The strong support from a number of innovative and strategic global investors in this financing round is strong validation of our business model and strategy.”
It’s worth noting that the new round of financing was also joined by new investor The Priceline Group, a world’s leading online travel services which boasts Booking.com, priceline.com, Agoda.com, and rentalcars.com. As The Priceline Group’s investment comes in, Meituan Travel, Meituan-Dianping’s travel and leisure arm, has reached a new strategic partnership agreement with Agoda.com, a global online accommodation reservation company. On top of that, the Priceline Group also reportedly holds nearly 13% of shares of Ctrip, China’s major online travel agency, according to local media.
“We are excited to support Meituan-Dianping,” said Todd Henrich, global head of Corporate Development of The Priceline Group, in the statement. “Our commercial relationship between Agoda.com and Meituan-Dianping will help each company benefit from the other’s expertise and capitalize on the opportunities presented by China’s exceptionally large travel market.”
Meituan-Dianping now connects more than 280 million annual active buying consumers with more than 5 million annual active local merchants across 2,800 cities in China, according to the company. Its business covers tier one cities and minority counties, processing 21 million orders on a single day. During the past year, Meituan-Dianping has taken up 86% market share for in-store dining sector and occupied 61% market share for on-demand delivery. Meituan Travel, on the other hand, has become China’s second largest hotel reservation platform, accounting for 36% market share, the company’s statement says.
“We are glad to continue providing Meituan-Dianping with both strategic and financial support as it fulfills its vision of transforming China’s food and lifestyle services industry,” said Martin Lau, President of Tencent, in the press release. “The company is executing smoothly and at scale across multiple categories, is providing convenience and value to consumers, and is contributing to a healthy and diversified China Internet ecosystem.”
Tencent is indeed making efforts to face off against Alibaba’s various services, especially when Alibaba in August helped Ele.me acquire Baidu Waimai to bring up its food delivery business to full strength. Now that Tencent just freshly poured in such huge amount of fund to Meituan-Dianping, the proxy war between China’s major tech giants shows no sign to chill down.
Other investors participating in the new financing round include Sequoia Capital, GIC, Canada Pension Plan Investment Board, Trustbridge Partners, Coatue Management, IDG Capital, Tiger Global Management, and China-UAE Investment Cooperation Fund.