Baidu ‘to raise up to $500m’ forWaimai

China Daily (USA) - - BUSINESS - By BLOOMBERG

Baidu Inc is seek­ing to raise as much as $500 mil­lion for its Waimai food de­liv­ery unit amida costly bat­tle with other Chi­nese in­ter­net giants for cus­tomers, ac­cord­ing to peo­ple fa­mil­iar with the mat­ter.

The com­pany is look­ing for at least $300 mil­lion and the fund­ing round hasn’t been fi­nal­ized, the peo­ple said, ask­ing not to be iden­ti­fied as the de­tails are pri­vate.

Us­ing scoot­ers to sup­ply ev­ery­thing from Star­bucks cof­fee to sliced sashimi, Waimai is in a pitched bat­tle with ri­vals to sign up de­liv­ery men and to con­vince restau­rants to join its ser­vice. Baidu is up against Ele.me, which scored a $1.25 bil­lion in­vest­ment from Alibaba Group Hold­ing Ltd, and the Meituan-Dian­ping busi­ness backed by Ten­cen­tHold­ings Ltd.

Baidu de­clined to com­ment on any fund­ing plans. The com­pany has pre­vi­ously strongly de­nied Chi­nese me­dia re­ports that it was con­sid­er­ing a sale or merger of Waimai and its Nuomi group buy­ing unit.

Baidu shares fell about 0.5 per­cent on Fri­day in US trad­ing to $167.70. The stock has dropped 11 per­cent this year af­ter a 17 per­cent slump in 2015.

Heavy in­vest­ment in the on­line-to-offline, or O2O mar­ket, has driven up costs as com­pa­nies pay sub­si­dies to build out their ser­vices and win mar­ket share. The bat­tle has al­ready claimed vic­tims, with Ber­lin-based De­liv­ery Hero aban­don­ing the Chi­nese mar­ket ear­lier this year.

The bat­tle for cus­tomers has be­come in­creas­ingly hos­tile. In Au­gust, Baidu sued Ten­cent and Sohu.com Inc over a spate of ar­ti­cles it said de­famed Waimai by pur­port­ing to ex­pose poor hy­giene at restau­rants on its ser­vice.

Baidu has in­vested heav­ily in sec­tors out­side its­dom­i­nant desk­top search busi­ness as it tries to find new growth as users switch to mo­bile de­vices.

XIN­HUA

A Baidu Waimai courier checks his cell­phone while tak­ing a break along­side his ve­hi­cle in Bei­jing.

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