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China’s Meituan-Dianping Raises $3.3B

24 points by cft 11y ago

deleted 11y ago
[deleted]
xhrufucjd 11y ago
A total collapse of this bubble seems inevitable at this point.
- 50CNT 11y ago
  What bubble though? Meituan or Chinese tech in general? Meituan had a multi-billion dollar valuation before this burst of funding, and just went through a merger with it's major competitor, they've got their market locked down. Baidu is trying to get it's offering in the space to become competitive, and it's throwing 3.3B at the problem. Using American companies, think of Instagram and Snapchat merging, getting a billion thrown at them, and Facebook pledging a billion at getting their offering in the space off the ground. That'd be just another day in the valley, wouldn't it? I mean if you're referring to the greater Chinese tech industry, then yes, there's probably bound to be some kind of contraction at some point in the future. With investors being scared of real estate and the stock market in China, a lot of money is getting thrown at startups that don't really deserve it, along with the sheer amount of hype that there's in the industry. It ain't dot-com bad, but it's certainly not good. But the companies that are making the headlines? They're edging around 90% market control, and up to 90% market penetration in Tier 1 cities. When things contract, they'll be the ones left standing.
- shalmanese 11y ago
  They also claimed something like $20Bn USD of passthrough revenue last year. It's hard to figure out what something like that is worth since, as a Grouponesque business, it's very easy to inflate the passthrough without providing real value. But if they manage to build a stable business in which they can capture at least 10% of the passthrough as commission of some kind, then they've already built a $2Bn USD revenue a year business which starts to justify their ~$20Bn USD valuation. Of course, right now they're nowhere near that point as they're furiously grabbing land via subsidies. It is, for sure, a potential valuation bust if they can't right their fundamentals before investor patience runs out. But if they can, then they're well on their way towards a $100Bn business.

24 points by cft 11y ago

deleted 11y ago

[deleted]

xhrufucjd 11y ago

A total collapse of this bubble seems inevitable at this point.

50CNT 11y ago
What bubble though? Meituan or Chinese tech in general? Meituan had a multi-billion dollar valuation before this burst of funding, and just went through a merger with it's major competitor, they've got their market locked down. Baidu is trying to get it's offering in the space to become competitive, and it's throwing 3.3B at the problem. Using American companies, think of Instagram and Snapchat merging, getting a billion thrown at them, and Facebook pledging a billion at getting their offering in the space off the ground. That'd be just another day in the valley, wouldn't it? I mean if you're referring to the greater Chinese tech industry, then yes, there's probably bound to be some kind of contraction at some point in the future. With investors being scared of real estate and the stock market in China, a lot of money is getting thrown at startups that don't really deserve it, along with the sheer amount of hype that there's in the industry. It ain't dot-com bad, but it's certainly not good. But the companies that are making the headlines? They're edging around 90% market control, and up to 90% market penetration in Tier 1 cities. When things contract, they'll be the ones left standing.
shalmanese 11y ago
They also claimed something like $20Bn USD of passthrough revenue last year. It's hard to figure out what something like that is worth since, as a Grouponesque business, it's very easy to inflate the passthrough without providing real value. But if they manage to build a stable business in which they can capture at least 10% of the passthrough as commission of some kind, then they've already built a $2Bn USD revenue a year business which starts to justify their ~$20Bn USD valuation. Of course, right now they're nowhere near that point as they're furiously grabbing land via subsidies. It is, for sure, a potential valuation bust if they can't right their fundamentals before investor patience runs out. But if they can, then they're well on their way towards a $100Bn business.