There’s a huge funding round from one of the top local services companies in China.
Meituan-Dianping, a company formed by a multi-billion dollar merger in 2015, said today that it has raised a $4 billion Seres C round from a group of investors led by existing backer Tencent.
Others involved include Sequoia, GIC, Canada Pension Plan Investment Board, Trustbridge Partners, Coatue, IDG, Tiger Global, and China-UAE Investment. Travel giant Priceline joined as a new investor.
There’s no word on the valuation, but recent reports pegged it as high as $30 billion. The company was valued at $18 billion 18 months ago.
Meituan-Dianping is a pioneer of what is called O2O in China. That stands for “offline to online” and it basically means services that connect offline commerce industries with consumers using the internet, and in particular smartphones.
It has reached impressive scale with up to 21 million orders at peak per day and five million merchants selling their wares on the platform over the past year. Meituan-Dianping claims that its deals span a whopping 2,800 cities in China, with an audience of 280 million users touching its service in the last twelve months.
The company is accustomed to raising large amounts. It pulled in $3.3 billion via its last financing in January 2016 and reports this summer predicted it was in process of raising as much as $5 billion in order to invest significant sums into growing its offline reach. Interestingly, the firm was said to have retained $3 billion of that sum, so it appears it is stacking up a war chest.
That’s primarily in response to increased competition with arch rival Ele.me, which is owned by Tencent nemesis Alibaba. (Alibaba was originally a backer of Meituan, but it later offloaded its assets in the joint entity to focus on Ele.me and its own Koubei platform.) Ele.me beefed up its business significantly in August when it acquired the food delivery business from Baidu Waimai, another Chinese O2O player that is controlled by search giant Baidu.
With Baidu increasingly focused on AI and enabling tech — while the O2O space demands capital — the firm offloaded a major component in Waimai and agreed to a wider “business cooperation” with Ele.me. That clearly generated a need for Meituan-Dianping to go out and make moves of its own.
Meituan-Dianping said it plans to allocate the new capital to its in-store dining, lifestyle and entertainment, on-demand delivery and travel and leisure units. In the case of that travel unit, which launched back in May, it has teamed up with Priceline to work with its Agoda.com service to give it a boost.
Beyond those staples areas, it said it plans to invest in AI and other technologies that help tailor its wide selection of deals to suit individual user tastes. It is also eyeing new verticals “with high potential” where it can expand its existing focus on deals.
“We pride ourselves on being a global pioneer that is creating one-stop service offerings under a unified platform,” CEO Wang Xing said in a statement.
“Customers are able to access various types of services, from restaurant reservations to on-demand delivery, hotel and travel bookings, and entertainment, all through a single mobile application,” he added.