On Tuesday, Meituan-Dianping confirmed that the new company has completed a new round of funding, receiving USD 3.3 billion after its merger last October. It broke the highest fundraising record for Chinese tech startups of USD three billion set by Didi Kuaidi.
After this round of funding, the new company’s valuation will be boosted to USD 18 billion. The new investment pouring in will account for 16.67% of the company’s shares, according to iFeng Tech.
According to NetEase News, before the merger, Dianping raised a total of USD 1.39 billion in the past nine years while Meituan completed four rounds of funding amounting to USD 1.07 billion. Along with the USD 3.3 billion it received this round, the company has raised about USD 5.8 billion in total.
Leaks suggest that the investors in this round include Chinese tech giant Tencent, which participated in Dianping’s Series E and Series F financing before the merger. It’s believed that Tencent contributed at least USD one billion to the new round.
Other prominent investors include Sequoia Capital — an early investor in both Meituan and Dianping — and Russian venture capital fund Digital Sky Technologies (DST).
Prior to the merger, Meituan was China’s biggest group buying platform and China’s top food delivery platform with 41.2% of the market as of the first half of 2015, according to Chinese market research company Analysys International. Dianping was then known as China’s Yelp, starting their business with restaurant reviews and later extending into group buying and travel booking.
The new company is a comprehensive on-demand services platform covering food delivery, ticket booking, travel reservations and beauty services. After the new round of financing, it will possibly face another cash-burning war against other on-demand service platforms including Baidu-backed Nuomi, Alibaba-backed Koubei and food delivery platform Ele.me.
It’s also rumoured that Alibaba has acquired 27.7% of Ele.me’s shares with over USD 1.25 billion and will become Ele.me’s controlling shareholder with a framework agreement signed at the end of 2015.