Tim Culpan is a technology columnist for Bloomberg Gadfly. He previously covered technology for Bloomberg News.

Congratulations, Meituan Dianping. The Chinese group-buying and restaurant reviews service just closed a $4 billion round at a $30 billion valuation, it said in a statement Thursday.

That's at the upper edge of what some reports had pointed to when news of the raising began circulating last month. It means Meituan overtakes Airbnb Inc. as the world's fourth-most-valuable startup, according to CB Insights. It also means four of the top five unicorns are Chinese, trailing Uber Technologies Inc., which still holds the crown at $68 billion.

Unicorn Leapfrog
Meituan Dianping's latest funding round helps it overtake Airbnb for fourth spot in the global list of $1 billion startups
Source: CB Insights

This latest tranche adds to the $3.3 billion Meituan grabbed last year in a round that brought its valuation to $18 billion. In May, it still had $3 billion in cash reserves, Bloomberg's Lulu Chen reported, citing company officials.

The thing about these mega rounds is that they not only rapidly raise valuations, they inflate cash holdings in a way that may alleviate the pressure to exercise fiscal prudence. Such a notion may be scoffed at among young startups, but a decade after its Series A, Meituan should be heading toward an IPO.

That creates a few possible scenarios. Meituan has burned through most of its cash in the past five months; or it didn't really need another $4 billion but went ahead with it anyway. I don't know which of those two possibilities is more of a head scratcher, but I'll leave the worrying to major investors Tencent Holdings Ltd. and other series participants including Priceline Group Inc. and Sequoia Capital LLP. Maybe Meituan has earmarked some of the money for M&A, but deals are generally done via share swaps.

Go Fund Me
Meituan has raised more than $7 billion over the past decade
Source: Crunchbase
Note: Crunchbase data lists two Series B rounds.

Regardless, I doubt any of Meituan's backers will be sprouting grey hairs. It's quite possible some of the existing investors decided to join simply to ensure their stakes weren't diluted. Others probably know a Tencent-powered bandwagon is the best type to jump on.

Just as likely is that everyone climbed aboard for one last share purchase before Meituan goes public. Then they can unload their stock after the lockup period and reap a nice windfall.

When that tactic is used in real estate, it's called flipping. In startup land, it's simply called being smart.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

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Tim Culpan in Taipei at

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