But Wang had been borrowing money from his parents to keep the business afloat. The son of another serial entrepreneur from southeast China’s Fujian province, Wang attended the prestigious Tsinghua University in Beijing, before continuing his studies in the U.S. The two companies would retain their respective brands and management structure and independently operate their businesses. The merger of Dianping and Meituan will create a dominant player in services such as finding deals at restaurants and booking cinema tickets through smartphones. J.P. Morgan Asset Management’s website and/or mobile terms, privacy and security policies don't apply to the site or app you're about to visit. The situation was compounded when the company received a US$4bn round of private equity funding in November 2017. Additional reporting by Matthew Miller; Editing by Muralikumar Anantharaman. But having origins as a copycat isn’t necessarily such a bad thing in a country where many top internet firms trace their origins to knockoff business models. The company is headquartered in Beijing and was founded in 2010 by Wang Xing.The company operates different apps and websites for different services. The team moved beyond its existing solutions and investment horizon, and widened its choices from time deposits and certificates of deposits to money market funds (for operating cash) and a managed reserves strategy (for reserve cash). READ IMPORTANT LEGAL INFORMATION. His company has gone on to dip its toe into almost every aspect of Chinese urbanites lives — from takeout delivery to ride-hailing, movie-ticket sales, travel bookings and bike sharing. It did not have a robust cash management structure in place, nor did it have an effective global cash investment strategy. In the first four months of 2018, the company had an adjusted net loss of 2 billion yuan, reflecting the $2.7 billion acquisition of bike-sharing startup Beijing Mobike Technology Co. Ltd. in April as well as increased sales expenses and rising debt. The platform posted a whopping gross transaction volume of nearly 360 billion yuan ($52.5 billion) last year, processing 5.8 billion transactions, iResearch said. Photo: VCG, Meituan Acquires Mobike in $2.7 Billion Deal, Online booking platform joins fierce battlefield of bike-sharing in China, Meituan Prices Hong Kong IPO Near Top of Range, Online services provider to raise $4.2 billion in offering, giving valuation of $53.4 billion, Battery and Hybrid Cars Will Dominate China’s Roads in 15 Years, Trending in China: Do The Sins Of The Father Fall On Their Sons? Its prospects have drawn in big-name backers including social media giant Tencent, Singaporean state investors GIC Pte. His company cemented its leadership in the space after its $15 billion merger in 2015 with top rival Dianping, which operated an app similar to U.S. online restaurant review site Yelp Inc. Meituan now operates the world’s largest on-demand delivery network by number of deliveries, according to iResearch. Since then, however, Renren’s original site has fallen into obscurity, overtaken by more popular services like the Twitter-like Weibo and Tencent’s WeChat instant messaging service. With its massive user base, it completed 5.8bn transactions in 2017. A surge in users meant more investment was needed in servers, and Wang decided to cash out by selling his venture to Oak Pacific Interactive in 2006. As Qiang Guo, Finance Director recalls, “We needed to maintain sufficient liquidity at all times for strategic acquisitions.”. Given the pace at which Meituan-Dianping was growing, the unicorn* had a major challenge to accurately forecast its cash flow beyond three months. Undaunted, Wang and other friends decided to detour from social networking sites by dabbling in e-commerce. Having evolved into a world-class treasury department, we can bolster the corporate’s ability to meet ambitious goals,” concludes Guo. Zhang Tao and Wang Xing, the respective chief executives of Dianping and Meituan, will become co-CEOs of the yet to be named new company. The match-up marks the end of another O2O service war in China, once again bringing … Read about companies with specific cash management challenges and the solutions when they worked with J.P. Morgan Asset Management. The deal is the second large-scale merger of competing start-ups this year. From that beginning, Meituan has positioned itself as an online-to-offline services specialist, which typically bring together everyday services like restaurant dining and takeout delivery with high-tech internet touches. The Meituan-Dianping treasury team reviewed its investment requirements (security, liquidity and yield) and segmented its cash based on liquidity needs. It took 14 years and a couple of hits and misses before Wang would land at the top of his current endeavor that has become China’s largest provider of on-demand services. * a private start-up valued at over US$1bn. Indeed, they own 20% of the company. Please review its terms, privacy and security policies to see how they apply to you. Meituan-Dianping (Chinese: 美团网; pinyin: Mĕituánwǎng) is a Chinese shopping platform for locally found consumer products and retail services including entertainment, dining, delivery, travel and other services. CLICK HERE >. The Friendster-like Xiaonei took off rapidly and was a hit among college students. The challenge Speculation of a merger between Dianping and Meituan had swirled in early 2015, as Dianping finished raising more than $800 million in capital at a valuation of $4 billion. The team also switched to manage cash domestically in China and abroad through a single platform. We drank beers in total silence with tears pouring down from our faces,” Wang was quoted as saying by the Chinese media, recalling the sadness they felt at having to abandon their pet project. “A business model like Meituan’s could mean it will either make a lot of money, or bleed a lot of cash,” an analyst who recently attended the company’s IPO roadshow in Hong Kong told Caixin. When it came back in November 2010, rivals offering similar knockoff services such as Weibo had already taken the Chinese cyberworld by storm. Copyright © 2019 Caixin Global Limited. Wang Xing, co-founder and CEO of Meituan Dianping, speaks during a press conference in Hong Kong on Sept. 6. In 2017, it completed about 2.9 billion deliveries with an average time of 30 minutes. But the service was taken offline after riots in the restive, Muslim-majority Xinjiang region of July 2009 and would not return for more than a year. That youthful age helped to place him in this year’s “40 Under 40” list of top young businesspeople compiled by Fortune magazine, joining the ranks of Facebook’s Mark Zuckerberg, Instagram’s Kevin Systrom and Airbnb’s Brian Chesky. China Renaissance served as exclusive financial adviser to both Meituan and Dianping. The merged company could be valued at $15 billion or more, and a more precise valuation may come in the next few weeks as it negotiates a fresh round of funding with investors, said a person with direct knowledge of the deal, who couldn’t be named because details of the transaction were not disclosed. Its treasury team found the comprehensive global cash investment solution it was seeking and invested a significant portion of the latest funding in J.P. Morgan Global Liquidity’s USD strategy. Meituan-Dianping believed J.P. Morgan Global Liquidity would strive to achieve principal safety and be flexible in accommodating large cash investment flows. Meituan and Dianping used to be separate companies and rivals in the food-delivery and daily-deals spaces, but the two merged in 2015, helped along by …