Chinese e-commerce platform Pinduoduo announced Tuesday that it has secured $1.1 billion in a private share placement from a number of long-term investors.

Why it matters: Earnings misses for two consecutive quarters coupled with throttled business from the Covid-19 outbreak have dented Pinduoduo’s share prices since late last year. The timing of this investment conveys investor confidence about the company’s growth prospects.

Details: Pinduoduo did not disclose the name of the investors, but sources from a Reuters report said private equity firms Hillhouse Capital and Boyu Capital are on the list.

  • With the funds, the investors will purchase the company’s newly issued Class A ordinary shares, which represents approximately 2.8% of Pinduoduo’s total outstanding shares.
  • The proceeds will be used to boost online sales and marketing of agricultural products, push the transformation of the export-oriented enterprises, as well as build out infrastructure for the company’s customer-to-manufacturer (C2M) business.
  • The transaction is expected to close in early April.

Context: The current funding comes just six months after Nasdaq-listed Pinduoduo raised $1 billion in a convertible bond.

  • Rival Alibaba is doubling down on its own C2M selling platform aimed at luring bargain-seeking consumers.

Emma Lee

Emma Lee is Shanghai-based tech writer, covering startups and tech happenings in China and Asia in general. We are looking for stories related to tech and China. Reach her at lixin@technode.com.