E-commerce group Alibaba has entered talks to sell a stake in China-based e-commerce and local listings platform Meituan-Dianping for up to $1bn, the Financial Times reported yesterday.
Local listings and reviews service Dianping and group buying platform Meituan agreed a merger in October 2015 that valued the newly created firm at $15bn.
Alibaba, which led Meituan’s $50m series B round in 2011 and participated in its $300m series C in May 2014, holds a stake sized in the “high single digits” according to a person familiar with the matter.
However, it plans to divest its stake in the merged company in order to concentrate more fully on Koubei, the online-to-offline services platform it runs with financial services affiliate Ant Financial. Alibaba and Ant Financial ploughed $1bn into Koubei in June this year.
A person with knowledge of Alibaba’s strategic thinking told the FT: “Meituan is a financial investment [for Alibaba], while Koubei is a strategic direction.
“Alibaba is looking at whether this is the right price and the right time to exit.”
The news comes in the wake of reports earlier this month that suggested internet company Tencent, a pre-merger investor in Dianping was set to invest $1bn in the merged entity as part of a $3bn round.
Meituan and Dianping have raised about $2.6bn between them from investors also including smartphone producer Xiaomi, conglomerates Wanda and Fosun, Temasek, FountainVest Partners, TrustBridge Partners, Sequoia Capital, Qiming Venture Partners, Lightspeed Venture Partners, Hillhouse Capital, Fidelity Management and Research, General Atlantic, Northern Light Venture Capital and Walden International.