VC-backed China group-buying site Meituan raises $700m

The latest investment values the four-year-old company at $7 billion, Meituan said via its official Weibo microblog.

Xing Wang, Meituan's CEO, said Sunday at a media conference that transaction volumes are expected to reach RMB100 billion this year and RMB1 trillion by 2020. Last year the company generated about RMB46 billion in sales.

Meituan came online in 2010 and soon received $20 million in Series A funding from Sequoia Capital. In 2011, Sequoia, alongside with Alibaba, Walden International and Northern Light Venture Capital injected $50 million. In May last year, Meituan reportedly raised a $300 million Series C round led by General Atlantic, with participation from Sequoia and Alibaba, valuing the company at $4 billion.

The company, which has about 200 million active users, said it is not rushing to list within the next two years. The new capital will be used to hire more marketing staff and technicians to explore cloud computing development.

A few weeks ago, WoWo, which came to prominence as operator of the 55tuan group-buying site before expanding into a broader entertainment and lifestyle-focused e-commerce platform, filed for a US IPO. Backers include CDH Investments, Zero2IPO Capital and Tianyou Investment.

The group-buying industry in China was flooded with new entrants from 2010 onwards, creating massive oversupply. Margins were hit and a number of players subsequently went out of business. Meituan is now seen as the clear market leader, followed by Dianping - also known as an online listings provider and one of China's most popular sites for restaurant reviews - and Nuomi.

Dianping, which has received several rounds of VC funding, sold a 20% stake to Tencent Holdings last year. 

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