China-based group buying platform Pinduoduo filed on Friday to raise up to $1bn in an initial public offering in the US that would allow internet group Tencent to exit.
The company, which is registered under the name of Walnut Street Group, was reportedly valued at $15bn as of its last funding round in March 2018, which was led by Tencent and sized at $1.37bn according to the IPO filing, contrary to contemporary reports of a $3bn round.
Pinduoduo operates an e-commerce platform that offers customers discounts if they buy products in teams. The groups can be organised on the platform or through social media platforms like Weixin and QQ where users in effect market products they want to friends.
The platform had 295 million active buyers in the year ending in March 2018. It generated about $220m in revenue for the first three months of this year, making a $32m net loss in the same period.
The offering will follow $1.8bn of funding, with the March round also including venture capital firm Sequoia Capital China, Gaorong Capital – the private equity firm previously known as Banyan Capital – and an investment vehicle known as Image Frame Investment (HK).
Tencent had already invested $100m in the company in June 2017 according to the filing, having initially joined Banyan, Sequoia China, Cathay Capital’s Sino-French Innovation Fund and New Horizon Capital for a $113m round the year before.
Pinduoduo’s founder and CEO Zheng Huang owns 50.7% of the company, while Tencent holds an 18.5% stake, Banyan Partners 10.1% and Sequoia Capital China 7.4%.
Credit Suisse Securities (USA), Goldman Sachs (Asia) and China International Capital Corporation Hong Kong Securities have been appointed underwriters for the offering.