China’s Meituan-Dianping acquires PE-backed Mobike

Financial terms were not disclosed but media reports said Mobike was valued at approximately $2.7 billion and Meituan-Dianping would pay through a combination of cash and shares. Mobike will continue to operate as an independent entity under its own brand, led by Davis Wang, the co-founder and CEO. Meituan-Dianping CEO Xing Wang will become chairman of Mobike.

“Bringing bicycles back to cities is the heart and vision of Mobike, and the mission of Meituan is to 'eat better, live better'. Both companies promote a healthy and beautiful life supported by mobile technology. Going forward, Mobike and Meituan-Dianping will continue to prioritize creating user value as the center of its business, and will continue to create a superior user experience,” Davis Wang said in a statement.

Meituan-Dianping, which was created in October 2015 through a merger of the two market leaders, offers various types of O2O services including restaurant reservations, food delivery, hotel and travel bookings, and entertainment. It claims to connect more than 320 million users with about four million local merchants across 2,800 cities in China.

The company's most recent funding round - at a post-deal valuation of $30 billion - was led by Tencent last year. Meituan-Dianping is seeking to broaden its ecosystem domestically and overseas, launching a consumer-focused fund last year and also branching into transportation. The company has reportedly launched ride-hailing services in China and took part in a funding round for Indonesian ride-hailing and delivery platform Go-Jek

Mobike and its competitor Ofo between them control over 90% of China’s bike-sharing market. Customers use a mobile app to find a conveniently located bike, reserve it, and unlock it. On reaching their destination, they park the bike by the side of the road and lock it. They are charged through the app, based on how far they have traveled. At present, Mobike operates in over 200 cities in 15 countries, has more than 200 million users, and claims to facilitate 30 million transactions every day.

The company has raised five funding rounds in the past three years, including a $600 million Series E round led by Tencent in June 2017. Investors from previous rounds include Temasek Holdings, Hillhouse Capital, Warburg Pincus, TPG Capital and Qiming Venture Partners.  

The acquisition of Mobike comes shortly after Alibaba Group agreed to take control of Ele.me, a local food delivery platform. Ele.me's services will be combined with those of Koubei, Alibaba's existing local services platform. Koubei, which competes directly with Meituan-Dianping in some areas, completed a $1.1 billion funding round last year. Alibaba is also the main shareholder in Ofo, leading an $866 million round for the company last month.

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• Topics
• Greater China
• Buyouts
• Trade sale
• Technology
• Consumer
• China
• TMT
• Venture
• Tencent
• Warburg Pincus Asia
• Hillhouse Capital Management
• Qiming Venture Partners
• TPG Capital
• Meituan-Dianping