Meilishuo.com, the Chinese women’s apparel retailer backed by Tencent Holdings Ltd., is seeking to raise about $300 million from investors ahead of an initial public offering, a person familiar with the situation said.
The current round of funding will likely be Meilishuo’s last before a stock-market listing, the person said, asking not to be identified as the information is private. The company, whose name means “Beauty Talk” in Chinese, is considering seeking a U.S. IPO that could take place as soon as next year and value it at about $2.5 billion, two people said.
Meilishuo, founded in 2009 by Xu Yirong, runs an online marketplace selling clothes, shoes and handbags mostly to young women. It has about 15,000 merchants selling on its website and a mobile application that has been downloaded 100 million times, according to a company brochure.
The company is seeking funds to better compete in China’s e-commerce market, which is projected to expand to 3.6 trillion yuan ($580 billion) in 2016 from an estimated 3 trillion yuan this year, according to Shanghai-based Internet consultant IResearch. Chinese firms led by Alibaba Group Holding Ltd., the nation’s biggest Internet company, have completed U.S. IPOs in the last year that raised a combined $28.8 billion, data compiled by Bloomberg show.
Shares of Tencent rose 1.2 percent, reversing earlier losses, to close at a record HK$161.80 in Hong Kong.
Meilishuo plans to nearly triple its transaction volume to 15 billion yuan this year, from 5.6 billion yuan in 2014, the brochure shows. It has raised five rounds of funding from investors including Tencent, China’s second-largest Internet company, as well as Sequoia Capital and Hillhouse Capital Group.
Jiang Xiaoci, a spokeswoman for Meilishuo, declined to comment while Canny Lo, a Shenzhen-based representative for Tencent, didn’t respond to an e-mail and mobile-phone text message seeking comment.