Nasdaq-listed Chinese e-commerce giant Pinduoduo Inc (PDD) is set to raise a corpus of $6.1 billion by pricing its offerings of convertible notes and equity, the firm announced on Wednesday.
PDD has offered $1.75 billion in convertible senior notes due in 2025, as well as priced an additional offering of 28.7 million American Depositary Shares (ADS) at $1.25 apiece. When the greenshoe option is exercised in full, it will also sell $250 million in notes and 4,305 million ADS. The offer was oversubscribed.
Proceeds from the move will be leveraged to enhance its balance sheet and to invest in infrastructure including business operations expansion, acquisition advancement, and partnership forging.
Meanwhile, the company expects to support investments in agriculture and manufacturing in a bid to empower producers to advance their value chain, it said in the statement.
With headquarters in Shanghai, five-year-old PDD is one of the largest e-commerce platforms in China. It offers consumers with value-for-money purchases and social networking shopping experience. PDD was listed in Nasdaq in 2018 raising $1.6 billion.
PDD registered 628.1 million annual active buyers as of March 2020. It’s GMV in the twelve months period ended March 31 stood at 1.2 trillion ($182 billion), per its recent press release.
In August this year, PDD launched Duo Duo Maicai for selling fresh produce. It allows customers to order food products online and to pick up at local outlets. PDD targets to invest in logistics infrastructure with an aim to expand Duo Duo Maicai across more provinces in China, CNBC reported on November 16.
“We are seeing large-scale changes in consumer habits as a result of COVID-19, which are accelerating digital transformation across different sectors,” said Chen Lei, Chief Executive Officer of Pinduoduo, in the statement,
“We are constantly evaluating how technology can be deployed to meet these changing preferences. We are prepared to invest capital and resources to improve our platform and build infrastructure to capture key opportunities,” he added.
Chinese tech giant Tencent is a long-term investor in PDD. It’s investment arm Tencent Investment had initially partnered Cathay Capital, Gaorong Capital, Lightspeed China Partners, and others collectively pouring $110 million in a Series B round funding in Pinduoduo in 2016.
Subsequently in 2017, Tencent Investment, Cathay Capital, Gaorong Capital, and Sequoia Capital China together pumped $230 million for PDD’s Series C round. In 2018, Tencent Investment along with Sequoia Capital China infused $1.37 billion in a Series D round funding in PDD.