Issue 31 | April 9, 2018

A Big Deal: Meituan Acquires Mobike
Meituan-Dianping, the $30 billion “super app” and the world’s fourth-most valuable startup, acquired Mobike, one of the biggest players in China’s bike-sharing market. The deal reportedly valued Mobike at $2.7 billion. After the acquisition, Mobike will remain independently operated and maintain its management team. Wang Xing, CEO of Meituan-Dianping, will become the chairman of Mobike.

Multiple media outlets reported that Tencent—a major shareholder in both Mobike and Meituan—actively pushed for this deal. Some commentators called Mobike “a gift for Meituan’s IPO.” According to media reports, Meituan may seek an IPO in Hong Kong as early as 2018 at a valuation of $60 billion.

Meituan already provides a myriad of services, including restaurant reviews and booking, food delivery, hotel and travel booking, and movie tickets.

The deal signals Meituan’s ambitions in mobility—it recently expanded into ride-hailing as well—and further intensifies its rivalry with Didi Chuxing, which has also aggressively expanded into bike sharing by rolling out its own bike sharing service, backing Ofo, and acquiring Bluegogo. Didi is reportedly expanding into food delivery as well.

Listen to Zhang Tao, founder of Dianping, discuss its mega-merger with Meituan in 2015 on the 996 Podcast, available on iTunesOvercastSoundCloud, and wherever else you listen to podcasts.

Note: Didi Chuxing is a GGV portfolio company. Hans Tung, Managing Partner at GGV Capital, is a personal investor in Dianping, which merged with Meituan.

A Number
$9.5B
 – Exit valuation of Ele.me, acquired by Alibaba this week

Alibaba has acquired the remaining shares of Ele.me, China’s leading online food delivery platform, to widen its New Retail strategy. Before the deal, Alibaba owned roughly 43% of Ele.me, having invested $1.25 billion in Ele.me in 2016.

Ele.me—which means “hungry yet?”—employs an army of delivery people on bikes across the country and competes with Tencent-backed Meituan-Dianping, which just acquired Mobike.

As part of Alibaba’s New Retail strategy, the company has poured money into offline logistic networks and brick-and-mortar stores. In November, Alibaba invested $2.87 billion into China’s top hypermart operator Sun Art Retail Group. Alibaba also operates dozens of offline grocery stores called Hema that promises local delivery within 30 minutes.

A War: AutoNavi and Ctrip Enter Ride-sharing

The ride-hailing war in China—which was relatively quiet in 2017 thanks to the domination of Didi Chuxing—has been kindled again. Alibaba-owned AutoNavi, one of the top mapping providers in China, announced it will be entering the ride-hailing market starting with the Chinese cities of Chengdu and Wuhan. AutoNavi said it will not take a cut from rides, allowing drivers to earn the full amount of the fares.

In the same week, Ctrip—China’s largest provider of online travel services—announced it has obtained a license to provide ride-hailing services in Tianjin, allowing it to operate nationwide. Ctrip already offers airport pickup, car rental, and chauffeur services in many markets around the world.

Meanwhile, the ambitious Meituan-Dianping continues its foray into ride-hailing. In a recent speech, Meituan CEO Wang Xing said Meituan already has a third of the ride-hailing market in Shanghai and Nanjing.

Note: Didi Chuxing and Ctrip are GGV portfolio companies.

996 Podcast: Brad Bao of LimeBike on Tackling America’s Last-Mile Problem
We interviewed Brad Bao, the co-founder and chairman of LimeBike, a fast-growing dockless bike sharing company in the US based in San Mateo, California. Founded in January 2017, LimeBike currently operates in more than 50 different markets in the US, and has provided more than 2 million trips since it launched. Before founding LimeBike, Brad was an investor at Fosun Kinzon Capital,and previously helped launch Tencent’s US operations as the company’s first employee outside of China. LimeBike is an example of a phenomenon known as “copy from China”—importing innovative business models from China into the US.

In this episode, we discuss Brad’s pivot from an investor searching for a bike-sharing deal to the founder of a bike-sharing company, why bike-sharing can work in the US, and why being cross-border is a crucial advantage in this space.

Listen now on iTunesOvercastSpotify, or SoundCloud.
We’re on XimalayaFM too! Just search “GGV996.”