Success stories of startups and investors in them. Meituan and Sequoia Capital China

In 2015, Meituan and its closest competitor Dianping completed a $15 billion merger, with Sequoia Capital China as a key investor.

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total yield

The total is invested:

$400 million

Share in the company after the IPO:

Yield:

$4,91 billion

1 227%

In 2015, Meituan and its closest competitor Dianping completed a $15 billion merger, with Sequoia Capital China as a key investor. And when the combined Meituan Dianping was valued at $55 billion in an IPO a few years later, the value of Sequoia's stake in the company reached approximately $4.91 billion, more than 12 times its investment.

Meituan started out as a Groupon copycat, but it eventually became one of the few Chinese coupon services (there were more than 2,000 such services in China at the time) with growing revenue and user base. Meituan was able to outgrow the copied model and reinvent itself. Today it is a major service provider, handling everything from movie tickets to restaurant reservations.

In a rapidly developing market, such as the Chinese one, many companies allow you to multiply your investments - the choice is quite large. The case with Meituan is notable not for the choice of an at least somewhat unique company for investment - it was not different in this - but for the fact that the main investor in the person of Sequoia Capital China made the right decision in time: prepared and carried out a merger with a competitor, thereby securing its investments.

Taking a company public on the stock exchange is not the main goal of an investor; moreover, it may not be a goal at all. The main goal of an investor is to make a profit, and this is not always associated with an IPO. It is important for investors to understand that sometimes an IPO can wait, and the first priority is to push the company to merge with a competitor.