The e-commerce platform plans to use the proceeds on the latest technology for updating its delivery system

Meituan food delivery

A Meituan food delivery person. (Credit: Capwiuejooh/Wikimedia Commons)

Meituan has raised $9.98bn through the sale of stock and convertible bonds for investing in research and development of autonomous delivery vehicles, drone delivery, and other cutting-edge technology.

The Chinese e-commerce platform, which is active in the food, transportation, travel, shopping, and entertainment sectors, has a valuation of $220bn.

Through a top-up placement at HKD273.8 ($35.28) for each placing share, the company sold 187 million shares, which were beneficially owned by Tencent. These represent nearly 3.2% of the company’s existing issued share capital.

The company sold $6.6bn worth shares and secured nearly $3bn in two-tranche convertible bonds.

Additionally, Meituan raised nearly $400m from Tencent by issuing 11.35 million shares to the latter. The shares represent nearly 0.2% of the former’s existing issued share capital.

Tencent and its associates, at the time of the announcement, held a stake of 17.7% in the Chinese on-demand delivery company.

For the full year 2020, Meituan reported revenues of RMB114.8bn ($17.67bn), a 17.7% growth compared to 2019.

The e-commerce platform claims to connect over 240 million young active buying consumers with over five million local merchants across China.

Established in 2010 by Wang Xing, the company got listed on the Hong Kong stock exchange in late 2018. It was subsequently changed its name from Meituan Dianping.

In 2018, the company acquired Mobike, a Chinese smart bike-sharing company. The acquisition expanded its transportation services, which already included ride-hailing and car-sharing.

Currently, Meituan’s business is made up of more than 200 service categories, which also include catering, movie ticketing, hotel and travel booking, and other entertainment and lifestyle services.

The company’s services are said to cover more than 2,800 cities and counties across China.