(Bloomberg) -- Meicai, a Chinese startup that connects restaurants with vegetable producers, has confidentially filed for an initial public offering in the U.S., according to people familiar with the matter, pushing ahead with plans to go public despite a tech selloff that has deterred other listings.
The Beijing-based company is working with banks including Bank of America Corp., China Renaissance Holdings Ltd. and Morgan Stanley on the IPO and will soon start gauging investors’ appetite, the people said, asking to not be identified as the information is private. The fundraising target and valuation haven’t been decided yet, they said. Deliberations are at an early stage and there is no guarantee that the company will proceed with its listing plan, the people said.
Meicai had previously considered raising about $300 million until the sudden departure of former Chief Financial Officer Wang Can slowed down its plans, Bloomberg News reported in February. IFR said this month the company is considering raising about $500 million in a U.S. IPO. Representatives for Meicai, Bank of America, China Renaissance and Morgan Stanley declined to comment.
Meicai -- whose name means “beautiful vegetable” in Chinese -- was founded in 2014 by rocket scientist Liu Chuanjun. Using a smartphone app, restaurant owners in China can order fresh produce such as bok choy and Sichuan peppercorns directly from farms, disrupting traditional wholesaling by cutting out middlemen. The company said it serviced more than 2 million restaurants in over 300 Chinese cities as of the end of 2020.
Meicai’s filing comes as the rush by Chinese firms to float in the U.S. hit a speedbump. In past weeks, at least three Chinese companies -- Hello Inc., Ximalaya Inc. and Qiniu Ltd. -- have put their listings on hold due to disappointing demand. Ant Group Co.-backed bike-sharing firm Hello will also likely lower its valuation target from the $10 billion it had initially planned, people with knowledge of the matter said. Hello declined to comment.
More funding is needed for Meicai as fresh-produce sourcing heats up. Chinese local services leader Meituan has bet on the segment to drive growth and anchor its food delivery and restaurant management business. Sequoia China-backed Shuhai Supply Chain, a startup specializing in logistics for restaurants’ ingredients and produce, is also a competitor.
Meicai, which counts Tiger Global Management, Hillhouse Capital, GGV Capital, Genesis Capital and CMC Capital Group among its backers, raised about $800 million in 2018 for a post-investment valuation of $7 billion. The company experimented with delivering online groceries to retail clients’ doorsteps during the onset of the Covid-19 outbreak, but has since halted those operations to refocus on servicing restaurants.
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