Chinese group-discount websites raised record-high funds

Meituan-Dianping has announced $3.3 billion in the latest round of internet funding, the biggest within the online-to-offline industry globally.
Written by Cyrus Lee, Contributor

China's largest group-buying and food delivery website Meituan-Dianping announced on Tuesday that it has raised as much as $3.3 billion in the latest round of internet funding amid cooling investment activities in the country.

The $3.3 billion fundraising is so far the country's largest private internet funding, and also the biggest within the O2O (online-to-offline) industry globally, according to a Sina news report on Tuesday night.

The new round was led by Tencent DST Global and Trust Bridge Partners, with various other private equity firms, according to the report. The company, formed through the merger of Meituan and Dianping last year, is now one of the most valuable startups in the world. Meituan and Dianping were primarily backed by Chinese technology giants Alibaba and Tencent, respectively, before the merger.

The two websites, which remain running independently and own the very majority of market shares, feature the combined functions of Yelp and Groupon to provide various local internet services, from offering dining discounts, to delivering food and providing movie ticket booking services.

Meituan-Dianping has extended its businesses throughout 2,800 Chinese cities, counties and districts, with daily orders exceeding 10 million, according to the Sina report. Combined revenue of the two websites reached 170 billion yuan ($26 billion) in 2015 and active users utilising their mobile apps reached more than 150 million.

Meituan-Dianping's record-high fundraising was under the backdrop of cooling investment activities among Chinese startups since late-2015.

Venture capital firms poured $37 billion into Chinese startups last year, more than doubled from 2014, according to another Chinese report from January 19. But only $7.8 billion worth of investments were registered in China in the fourth quarter, a slump of some 40 percent from $13 billion in the third quarter of 2015, signifying that some investors have either retreated or become more prudent.

The report further added that Xiaomi, the world's second-highest valued startup with a valuation of $45 billion, is now under debate for whether it's worth the price among investors. The Chinese rising star last week admitted it only sold a total 70 million units in 2015, falling short from 80 million -- a target revised from the earlier 100 million for last year.

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