Pinduoduo raises US$1.1 billion in private placement to fund new services such as live-streaming

Shanghai-based Pinduoduo will issue new Class A ordinary shares representing about 2.8 per cent of its total outstanding shares to ‘certain long-term investors’

The fundraising will bolster the company’s strategic flexibility for expansion, it says

Reading Time:2 minutes

Users of online group discounter Pinduoduo wave after ringing the opening bell on the Nasdaq Stock Market in New York during an event in Shanghai, China on July 26, 2018 to mark the company's listing on Nasdaq. Photo: Reuters

Published: 5:58pm, 31 Mar 2020Updated: 3:54pm, 21 Oct 2020

Chinese e-commerce platform Pinduoduo has raised US$1.1 billion in a private share placement that could fund its expansion despite current market volatility, the company announced on Tuesday.

The transaction for the newly issued Class A ordinary shares, which represent about 2.8 per cent of the company’s total outstanding shares, is expected to be closed with “certain long-term investors” in early April, it added in a press release, without naming the investors.

The announcement comes at a time of global market volatility due to fears and disruptions linked to the coronavirus pandemic.

But Pinduoduo said in a statement that it believes that “during times of uncertainty, there are attractive opportunities”.

“The extra funding gives us the strategic flexibility to capture opportunities to further benefit our users as we bring interactive experiences, such as our new live-streaming features and wider variety of value-for-money products to them,” said David Liu, vice-president of strategy.

Shanghai-based Pinduoduo has used strategies such as offering consumers deeper discounts on mostly generic products if they buy in groups to gain a huge following.

Select Voice

Choose your listening speed

Get through articles 2x faster

1.25x

250 WPM

Slow

Average

Fast

00:0000:00

1.25x