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Pinduoduo, shareholders, offer ADSs worth up to USD 1.74bn
Posted on Wednesday, 06 February 2019 13:18
Chinese social e-commerce platform Pinduoduo is kicking off a follow-on public offering worth as much as USD 1.74 billion some six months after raising USD 1.63 billion by floating on Nasdaq. The Cayman Islands-registered, Shanghai-headquartered online group discounter better known as PDD is selling 37.04 million American depository shares (ADSs) along 14.82 million existing securities put on the block by current investors. Proceeds from its part of the follow-on offering will be funnelled into expanding business operations, funding research and development, and bankrolling activities such as strategic investments and acquisitions. Selling shareholders include funds managed by Gaorong Capital (formerly known as Banyan Capital), Advantech Capital’s Sun Vantage, Lightspeed China Partners and Cathay Innovation. Underwriters, comprising Goldman Sachs Asia, Morgan Stanley, Bank of America Merrill Lynch, CICC, China Renaissance and KeyBanc Capital Markets, have an overallotment option for a further 7.78 million ADSs. Within three years since being founded - in 2015 - Pinduoduo has attracted over 300.00 million active buyers and over 1.00 million merchants. The group’s shopping format leverages a platform and ecosystem comprising hundreds of users, sellers, software operators and infrastructure service providers. Pinduoduo claims to be one of the leading Chinese e-commerce players in terms of gross merchant volume (GMV) in 2017 and 2018 of CNY 141.20 billion (USD 20.60 billion) and CNY 471.60 billion, respectively. Orders placed on the mobile platform reached 4.30 billion and 11.10 billion in 2017 and 2018, respectively, implying average daily orders of 11.80 million and 30.40 million, respectively. Revenues totalled CNY 7.47 billion in the nine months to 30th September 2018 (Q1-3 2017: CNY 564.70 million) and incurred net losses attributable to shareholders of CNY 7.87 billion (Q1-3 2017: CNY 538.70 million). Tencent has been a principal shareholder since February 2017 and entered into a strategic cooperation framework agreement with Pinduoduo in February 2018 by offering access points on Weixin Pay’s interface, among other things. © Zephus Ltd