Meituan-Dianping Acquiring Qiandaibao
More than 10 years ago, did you fantasize about these: going out without a wallet, just use a mobile phone to pay for the meal; when shopping, no cash or credit card are needed for the payment, and just pay the bill with a finger press. The wallet is phasing out from our life, and all these have become the reality. Mobile payment is becoming the mainstream. On September 26, ZHONG Capital's Xinmeida Qiandaibao, announced the successful completion of a merger with the Meituan-Dianping Group. This means that Xinmeida has overcome weakness of its lack of own payment platform. Qiandaibao will serve nearly 600 million users and over 4.5 million merchants of Meituan-Dianping and join forces to help the Meituan Pay upgrade to a more secure and convenient service platform. ZHONG Capital, the early investor of Qiandaibao, with its founding partner Ms. Guo, Jia, is also the leading investor in the company Shenzhou Fu (Hong Kong Listed). Ms. Guo said "as the main investor of Qiandaibao, we will regard the team as partners. The long-term establishment of strategic mutual trust and mutual assistance is not only based on the post management and guidance of the specialty, but also the application of our resources to establish the external advantages and support for Qiandaibao. " This is also the commitment of ZHONG Capital to all the founders of its invested portfolios. According to Ms. Guo, " for final M&A intentions and plans, especially on key matters, we respect the decisions made by the company itself. As investors, we are willing to give enough understanding to the founders and fully respect their decisions. At the time of mobile payment still "in the bud", Ms. Guo had a series of conversations with Sun Jiangtao. In the early years of investment, it was advancing with the guidance of this idea, after a period of time, Sun Jiangtao told Guo Jia that they are not only successfully registered a series of invention patents for mobile payments, but also made Qian Dai Bao became the first wave of the third party payment companys that licensed by the People's Bank. I believe that mobile payment is optimizing of our lives quickly, and in the future, the Meituan-Dianping will be able to bring us more imagination. Guo Jia said: "We have the most professional post-investment management team, as the director of Qiandaibao, we give the company full confidence in making critical judgments on important decisions. The same trust applies to those who chose listing or mergers and acquisitions. " Zhong capital, as a world-class asset management team, focusing on intellectual capital to support innovation and sustainable development of China. The Zhong team's investment direction is focused on: Internet, consumer upgrades, education services, financial services, media culture, modern equipment, health, and other high-quality innovative companies that serve the rapid rise of China's "middle income" families. The Zhong Capital Risk Management System follows the most stringent risk control standard of the global fund industry – the Luxembourg CSSF standard. The core team is based on Ventech China, a well-known venture capital fund. Currently, it serves the LP community, including domestic and international top family offices, large domestic state-owned assets, and Chinese government guidance funds. As one of the VC institutions with the highest IRR return rate in the world, as of now, the annualized return rate of its managed funds is over 60%. The following text is reproduced surging News Network, the author is Yang Xin Jie. Zhong Capital slightly edited the original content. After many years of involvement in movies, hotels, restaurants, and takeaways, the Meituan-Dianping finally made up for the shortcomings in the field of mobile payments. China’s largest lifestyle service platform, the Meituan-Dianping, announced that it has completed the acquisition of a wholly-owned third-party payment company, Qiandaibao. After the acquisition was completed, the Meituan-Dianping received a third-party payment license, and initially completed the payment layout of the eco-platform in the second half. Before all this happened, the Meituan pay function was suspended by the central bank and the recharging because the unlicensed operation. In recent years, other domestic companies have bought third-party payment companies. Among them, Xiaomi spent about 600 million yuan to buy the payment of the license to pay Jiefuruitong, the Media Group uses 300 million yuan in the acquisition of the 50% holding in Shenzhen Shenzhoutong Pay. In August 2016, Evergrande Group also acquired Guangxi Setpay, with a transaction price of 570 million yuan taking a detour for the license. According to informed sources, the Meituan-Dianping have been prepared for one year for the acquisition of third-party payment companies and eventually it was the Qiandaibao. This time, the total amount of the Meituan-Dianping on the acquisition of Qianbaobao exceeded that total number because the business-level cooperation in the acquisition was also involved. According to public information, Qiandaibao Network (Beijing) Information Technology Co., Ltd. is one of the first companies in China to obtain a third-party payment license issued by the central bank. Since its establishment in November 2008, Qian Daibao has provided payment solutions for small and micro merchants. The Qianbaobao payment license includes Internet payment, mobile payment, and bank card receipt, and is a cooperation partner of major commercial banks. The third party payment license is an industry access system established by the Central Bank (People's Bank of China). Originally, payment was only made between banks, UnionPay, and the Central Bank. However, with the development of e-commerce, in order to support the progress of online transactions, third-party payment that enhances online transaction credit functions has gradually developed, such as Alipay. In the past five years, the central bank has issued a total number of 270 payment licenses. However, with some problems emerging, such as the misappropriation of client deposits, the central bank tightened the issuance of licenses, which also made the purchase price of payment licenses increased. The market rumors that the current market price of a payment license is between 250 million and 480 million yuan. The payment license is a necessary card for the O2O industry to enter the second half, which is almost the consensus of the O2O platform such as the Meituan, Alipay word-of-mouth, and Baidu Nuomi. In the second half, O2O's core shifted from online to offline, and payment is undoubtedly the entrance and exit of all scenes. Word-of-mouth entered the O2O market as late as 2015 adopted the strategy of paying off-line to on-line drainage. The essence of this differentiated competition is precisely because of the Alipay’s third-party payment license. In just over a year, word of mouth disclosed that, as of September 2016, the average daily transaction volume of word of mouth exceeded 10 million bills/day. After the merger of the Meituan and Dianping, Wang Xing hoped that the Meituan-Dianping would maintain independent development and full control of the company. There is one investor stated that in the case of the Meituan and Dianping, other payment channels were used to do business were not their own in the past resulting in a limited ability to take advantage of innovation. After having their own licenses, they serve better in the second half using innovation pay . For example, the current Meituan and Dianping’s main strengths lie in movies, hotels, catering, and takeaways. Through mobile payments, these businesses can be strung together, and a new business can be bred, similar to Alipay’s Ant Financial, and WeChat’s payment. The direct example is that when it comes to the decoration business, the Tail money pledge of a traditional decoration company makes Party A and Party B full of contradictions, but with the third-party protection links, the natural doubt can be smoothly resolved, "so that every consumer is more secure, this is the the most important value of an acquisition of the license." After the acquisition of the payment license, the Meituan-Dianping could provide a better experience in the payment link and it can also help merchants to achieve the integration of financial management, procurement, cashier and other integrated services. It is easy for traditional service companies to complete self-management and more focus on service innovation. This not only can help with founding new companies, but also can deposit funds as the Meituan-Dianping has got the third-party payment licenses. Once users get used to the Meituan wallet, it will become another entrance for mobile consumption and become an important moat. . After theMeituan-Dianping’s purchase of Qiandaibao, Qiandaibao CEO Sun Jiangtao released an internal e-mail. The e-mail revealed that Qiandaibao has gone through eight years and established a comprehensive payment, clearing, risk control and compliance system, also products, business, channels, customer service system. Qian Dai Bao was the first company to obtain third-party payment licenses, and took orders under the line of exchange, and the financial status of the company entered a sound development. The cooperation with the China UnionPay’s offline market has also risen to a strategic level. The company has acted in concert both inside and outside, and it has docked the UnionPay system across the board. Sun Jiangtao said that these key decisions and phased achievements have brought Qian daibao into the platform for new business development. “In the past year or so, there have been many subtle changes in the payment industry. As the Chinese Internet has just opened the 'second half', we think it is time to change ourselves. We choose among opportunities and choose to hold hands with the Meituan-Dianping." Sun Jiangtao revealed that in the future, Qiandaibao will base on nearly 600 million users and over 4.5 million merchants of the Meituan-Dianping, making strong alliances, combining actual combat experience and professional skills into the “Internet+” second half, reaching into all link of the field of payments. “For us, the biggest competitor in front of us is not others but ourselves. As long as we put the safety of our users’ funds first, and always emphasize the user experience created by technology and data, we have the opportunity to win the second half of the payment. According to people who is familiar with the matter revealed that this time, the Meituan-Dianping made a bid to purchase Qiandaibao, part of which was used to purchase third-party payment licenses, and another part of the funds was used to purchase the actual business. The logic of the Meituan-Dianping’s decision to acquire Qiandaibao for the completeness of the license such as the Internet, mobile phone, and the nationwide and cross-border payment licenses; in addition, Qiandaibao’s operating team is solid safe, stable and has rich experience. It is also understood that Beijing Guotongbao Co., Ltd., the parent company of Qiandaibao, is preparing to list the NEEQ and it will be approved soon.