HONG KONG -- Meituan Dianping, the Chinese online platform known for food delivery services, aims to play a bigger role in serving the country's 8 million restaurants after it raises $4.4 billion in a stock listing to fund new businesses.
Meituan's upcoming initial public offering here could lift its valuation to as much as $55 billion, with an offer price range of 60 to 72 Hong Kong dollars. Shares begin trading on the Hong Kong Stock Exchange on Sept. 20.
The 8-year-old business, which counts Chinese tech company Tencent Holdings as a major investor, has grown into one of China's most watched unicorns -- unlisted startups valued at more than $1 billion. It has accumulated 340 million users in China by offering services including food delivery, restaurant reviews, ticket bookings and bike-sharing.
Meituan now wants to become a business solutions provider, as competition heats up in China's internet consumer services sector.
"Most people focus on the consumer-related segments when they look at the internet sector, but there is actually huge room for improvement on the merchant side," co-founder and CEO Wang Xing told reporters in Hong Kong on Thursday.
Wang said most of China's 8 million restaurants lack the resources to develop their own enterprise software. The Beijing-based company seeks to provide internet-based management tools that can help merchants better allocate resources with more accurate analysis backed by artificial intelligence, he said.
"Consumers are online. Merchants need to go online as well," Wang said, adding that the company will continue moving into catering and expand upstream in the industry chain. To ensure Meituan gets a head start in providing internet services to merchants, Wang said it will prioritize the Chinese market over international expansion in the near future.
Meituan's turn to business services comes as competition escalates in China's internet sector. Food delivery rival Ele.me, which is owned by Chinese e-commerce leader Alibaba Group Holding, has raised the stakes by announcing a fresh $3 billion funding round from investors including Japan's SoftBank Group in August.
Though Meituan has grown to be the world's largest on-demand food delivery provider, with a 59% market share in China, the company is nowhere close to making a profit. It logged a loss of 19 billion yuan ($2.78 billion) last year, three times bigger than its 2016 loss.
Meituan's moves elsewhere outside food services have been bumpy as well. The company said on Wednesday that it will halt further expansion of its ride-hailing business, as the service is not generating the expected synergy with its core business.