JD Daojia in talks for $500 million US IPO next May
Aug 19, 2019
Dada-JD Daojia is reportedly in talks with bankers for a $500 million US IPO in May next year, The Information reports, citing sources familiar with the matter. The company is a grocery delivery joint venture between JD.com and crowdsourced logistics platform Dada.
Why it matters: The potential IPO means that the company is seeking more ammunition to maintain its foothold in an increasingly competitive online grocery delivery market that includes rivals like Ele.me and Meituan.
- In addition, the listing of JD Daojia also points to the rise of online grocery delivery market in China.
- Parent company JD.com posted better-than-expected second-quarter earnings last week.
- Fu Bing, an executive of JD Logistics, revealed earlier this year that the company is planning a separate IPO for the logistics arm.
- Meituan is tapping its existing infrastructure to expand to grocery delivery industry, for example, by requiring its food delivery drivers to deliver groceries during peak demand times.
- Smaller players such as FreshMarket and Dingdong are also eyeing the market.
Details: A lot still remains unclear.
- The firm still hasn’t made a final decision on which US exchange to go public nor for how much to list.
- JD Daojia declined to comment when reached by TechNode on Monday.
Context: JD Daojia raised $500 million from Walmart Inc and JD last year.
- The joint venture currently has more than 100,000 offline retail stores, providing Chinese consumers in more than 100 cities with one-hour delivery services for fresh, groceries, flowers, medicine, beauty, household items, and other products.
- The venture now claims more than 74 million users and partners with more than 5,00 retailers including Walmart, Carrefour, Vanguard, Yonghui, and Watsons.
- During this year’s 618 festival, the platform doubled sales compared with the same period last year.