E-commerce unicorn Pinduoduo eyes US IPO

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One of China’s fastest growing e-commerce platforms has applied for an initial public offering in the US, marking an impressive zero-to-unicorn rise in just three years.

Pinduoduo, a group-purchase app similar to Groupon, is looking to list on NASDAQ with plans to raise as much as 1.63 billion US dollars.

In a filing to the US Securities and Exchange Commission on Monday, the company said it could raise its target to 1.87 billion US dollars if demand is high enough.

That would value the company at between 20 and 24 billion US dollars, a significant increase on its last valuation of 15 billion US dollars in April.

That previous valuation came after Pinduoduo filed its first IPO application under the name Walnut Street Group. The latest updated IPO is being filed under a new name, Pinduoduo Inc., and will see around 85.6 million American Depository Shares sold at a price of between 16 and 19 US dollars.

The company was only formed three years ago, and has enjoyed particular success in China’s third- and fourth-tier cities.

The platform’s group-purchase model, where users are encouraged to join other buyers to complete bulk purchases in return for large discounts, has set it apart from China’s biggest e-commerce companies, Alibaba and JD.com.

Pinduoduo claims to have more than 300 million users, and was the most downloaded online shopping app in China on Apple’s App Store in the past three months, according to App Annie.

In June, Pinduoduo had 55.9 million active daily users, ahead of JD.com with 34.3 million, but still behind Taobao (172 million), according to Chinese consultancy firm Jiguang.

Over the 12-month period ending in June, Pinduoduo reported a gross merchandise volume of 262 billion yuan (39.2 billion US dollars), not far behind JD.com which reported figures of 330 billion yuan.

Backed by investors including Tencent and Sequoia China, Pinduoduo has benefited from its use of social media, particularly on Tencent’s WeChat – China’s most downloaded app.