Tencent-backed Missfresh Races Dingdong to US IPO

The online grocer reportedly may raise up to $1 billion.
CapitalWatch StaffJun 10,2021,22:04

Missfresh Ltd. seeks U.S. investment amid a hot time for online grocery sales, having applied this week for an initial public offering that some say could be worth $1 billion.

Based in Beijing, the Tencent-backed company places neighborhood retail at its focus, operating online and offline on-demand retail business offering fresh produce and fast-moving consumer goods.

As of March 31, Missfresh said it had a network of 631 DMWs in 16 cities in China, striving to appeal to consumers willing to pay for the high-quality and convenient experience in grocery shopping, the company said in its filing with the U.S. Securities and Exchange Commission earlier this week.

Founded in 2014, in 2020, the company counted 8.7 million and 7.9 million users in 2020 and the twelve months ended March 31, 2021, respectively. As of March, it had over 31 million transacting users, according to the prospectus.

Revenues were $935.7 million in 2020 and $233.6 million in the first quarter of 2021. Net loss was $251.7 million in 2020 and $93.2 million in the three months through March 2021, the prospectus said.

Missfresh said it plans to use the new capital for sales and marketing, upgrading its technology and quality control centers and DMWs, improve its intelligent fresh market business and technology platform, and for the development of the retail cloud business.

Missfresh set $100 million as the target IPO size in its prospectus; however, the amount is merely a placeholder until the exact terms are determined. The South China Morning Post reported in April, citing sources, that the company could raise between $500 million and $1 billion.

In December 2020, Missfresh was valued at about $3 billion after a funding round worth $306 million led by the Qingdao government, according to the SCMP.

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

The online grocer has attracted a slew of big banks to its IPO; these are J.P. Morgan Securities LLC, Citigroup Global Markets Inc., China International Capital Corp. Hong Kong Securities Ltd., China Renaissance Securities (Hong Kong) Ltd., CMB International Capital Ltd., ICBC International Securities Ltd., Needham & Co. LLC, Futu Inc., and Tiger Brokers (NZ) Ltd.

Missfresh hopes to become listed on the Nasdaq Stock Market under the symbol “MF.”

Topics:Dingdong, Pinduoduo, Missfresh, PDD, MF, DADA