Food delivery giant Meituan, which competes with Alibaba-backed Ele.me among others, has raised $10 billion in stock and convertible bond sales according to Reuters. Backed by technology conglomerate Tencent, its largest shareholder whose stake now stands at around 17%, Meituan says it plans to use its new resources to invest in autonomous delivery vehicles, delivery drones and other cutting-edge technology. « Meituan will use most of the capital in updating its delivery system which currently relies on human drivers and will soon be unaffordable for the company as labor costs continue to rise in China”, said Zhang Yi, Head of consultancy iiMedia Research, « It is making plans for its future in 5 to 10 years time ». The food delivery market, which brings in more than half of Meituan’s total sales, has grown more than five times since 2016 in China and is worth over 650 billion yuan ($100 billion), according to iResearch. Meituan, which had an estimated 68.2% of that market in the second quarter of 2020 according to Trustdata, has now reached a market valuation of $220 billion.
Source : Reuters
Photo ©Meituan Raises
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