Shanghai-based ecommerce marketplace Pinduoduo, China’s third-largest after Alibaba and JD.com, is seeking to raise up to $1 billion in a U.S. IPO on an exchange to be named later, less than three years after its founding, according to various media reports.
In 2017 the Shanghai-based company’s losses rose 55% to $79.5 million while revenue tripled to $278 billion, according to its IPO filing. Pinduoduo is a Facebook/Groupon-like setup, where shoppers can spot deals on various products and then recruit friends to buy at a discount.
Pinduoduo is able to offer goods at discounts of up to 20% compared with market rates by letting shoppers buy direct from manufacturers. The company was founded by ex-Google engineer Colin Huang and is backed by Tencent Holdings Ltd. and Sequoia Capital China, among others.
In June Pinduoduo’s daily active users reached 55.9 million, having surpassed JD.com (34.3 million) in January, and is now second only to Alibaba’s Taobao app (172 million), according to research by Chinese consultancy Jiguang.
Pinduoduo saw its valuation jump about 10 times to about $15 billion after its last round of fundraising in April which brought in $1 billion. The company has benefitted from a large base of users in lower-tier Chinese cities, giving them a different experience than Amazon or Alibaba, where customers use keywords to find a purchase after scrolling through several options.
You can read the full Bloomberg account here.