Dingdong Files for US IPO Seeking Valuation of $6 Billion

The Chinese fresh produce deliverer is racing Missfresh to a listing in New York.
CapitalWatch StaffJun 10,2021,15:36

Dingdong (Cayman) Ltd., a Shanghai-based e-commerce platform for fresh groceries, has filed for an initial public offering in New York.

The online retailer, backed by SoftBank Group, Sequoia Capital, and Tiger Global, aims to fulfill China’s demand for product quality, speedy delivery and product variety at attractive prices. It sells fresh produce, meat and seafood and other daily necessities in China “supported by an extensive self-operated frontline fulfillment grid,” Dingdong said in its prospectus, filed this week with the U.S. Securities and Exchange Commission. The company delivers nearly 1 million orders per day, with target delivery time of 30 minutes, it wrote in the filing.

In addition, the company said it aims to modernize China’s agricultural supply chain through “standardization and digitalization, empowering upstream farms and suppliers to make their production more efficient and tailored to actual demand.”

Dingdong posted striking growth – it saw tripled year-over-year revenue growth in 2020, reaching $1.7 billion, while losses widened to $484.9 million. Its GMV was nearly $2 billion, representing a CAGR of 319% from 2018, outpacing market growth. Citing research by China Insights Consultancy, Dingdong said it commanded market share of 10.1% last year.

In the first quarter of 2021, Dingdong said revenue reached $580.3 million, with 69.7 million total orders fulfilled and an average of 6.9 million monthly active users. Of those users, 22% were members of the Dingdong program. Losses in the first quarter increased 466% year-over-year to $211.4 million, according to the prospectus.

Dingdong said it expects to use the proceeds from the offering to increase penetration in its existing markets and expand into new ones, invest in upstream procurement capabilities, and boost its technology and supply chain systems.

The company has hired Morgan Stanley & Co. LLC, BofA Securities, Inc., Credit Suisse Securities (USA) LLC, and Mission Capital Management Ltd. to secure its IPO in New York.

Dingdong expects to trade on the New York Stock Exchange under the symbol “DDL.” As reported by Reuters, citing sources, the company expects to raise up to $500 million, which would give it a valuation of $6 billion.

Reuters also said Dingdong plans to open books in two weeks, with the IPO to complete in late June.

In China’s fresh produce e-commerce market, Dingdong is rivaling giants like Pinduoduo Inc. (Nasdaq: PDD) and Tencent-backed Missfresh Ltd.; the latter filed for a New York IPO on the same day.

Topics:Dingdong, Pinduoduo, Missfresh, PDD