Chinese grocery app Dingdong Maicai is considering an initial public offering in the U.S. as soon as this year to bankroll its expansion in the competitive fresh food delivery market, according to people familiar with the matter.
The Sequoia Capital China-backed company is working with advisers on the offering, which could raise at least $300 million, the people said, requesting not to be named because the discussions are private.
Deliberations are at an early stage and details including size and timeline could still change, the people said. A representative for Dingdong Maicai didn’t immediately respond to requests for comment.
Dingdong Maicai, which means “Dingdong buy vegetables” in Chinese, is competing in China’s crowded fresh food distribution sector, fending off rivals including Tencent Holdings Ltd.-backed MissFresh and platforms operated by Alibaba Group Holding Ltd. and JD.com Inc. Consumers sheltering at home during the pandemic have reinvigorated a once-difficult groceries arena, and Dingdong now needs ammunition to attack a Chinese online fresh foods sector that could reach 1.27 trillion yuan ($197 billion) by 2025.
The Dingdong Maicai app, founded in 2017, delivers fresh products including vegetables, soy products, fruits and meat, according to its website. Its backers include General Atlantic, Bertelsmann Asia Investments, Qiming Venture Partners and Gaorong Capital, according to Crunchbase.
Dingdong Maicai expanded aggressively last year, extending its operations to 27 cities including Beijing, Nanjing and Guangzhou, according to a local media report this month. The company receives more than 850,000 orders each day and has a monthly revenue exceeding 1.5 billion yuan, the report said, citing statistics provided by Dingdong Maicai.