China’s Yelp-Like Dianping Said to Appoint Advisers for U.S. IPOJonathan Browning, Leslie Picker and Fox Hu
Dianping Holdings Ltd., the operator of a Yelp Inc.-like website in China, is working with Goldman Sachs Group Inc., Morgan Stanley and Deutsche Bank AG on an initial public offering in the U.S., said people with knowledge of the matter.
The IPO may raise about $500 million to $1 billion, said two of the people, who asked not to be identified because the discussions are confidential. China Renaissance Securities is also working on the deal, according to the people.
Dianping’s share sale would follow Chinese Internet retailer JD.com Inc.’s $1.8 billion offering and online marketplace Alibaba Group Holding Ltd.’s proposed listing that may raise about $20 billion. The companies are seeking to take advantage of soaring online spending in China, where e-commerce sales jumped 52 percent in the first four months of 2014 from a year earlier, according to the statistics bureau.
Dianping had more than 100 million active users in the first quarter for its reviews and discounts for food and entertainment, according to its website. Shenzhen, China-based Tencent Holdings Ltd. in February acquired a 20 percent stake in Dianping to gain access to the site’s location-based shopping and entertainment services.
Zhang Tao, Dianping’s founder and chief executive officer, said in October that the company may be worth more than $10 billion, and he would prefer a U.S. listing. Dianping could turn a profit as soon as this year, Zhang said at the time.
Wang Rui, a Shanghai-based spokeswoman for Dianping, declined to comment on the potential IPO.
Dianping, backed by Sequoia Capital and Lightspeed Venture Partners, was founded in 2003 in Shanghai and offers local business-search services that include consumer-generated reviews. Users can also buy coupons and enjoy group discounts in the same way as on Groupon Inc.
Yelp has a market value of $4.71 billion and Groupon is worth $4.14 billion. JD.com has soared 53 percent since its IPO last month, taking its market value to $36 billion.
Dianping had more than 30 million reviews covering 2,300 cities as of December, according to its website. More than 75 percent of Dianping’s traffic comes from mobile users, and the company had more than 90 million unique mobile users as of December.