SHANGHAI, China, Dec. 21, 2020 (GLOBE NEWSWIRE) -- Pinduoduo Inc. (“Pinduoduo” or the “Company”) (NASDAQ: PDD) said a global institutional investor will purchase close to US$500 million of new shares through a private placement as the agriculture-focused technology platform pursues its strategic priority of raising farm productivity and improving food security and quality.
The investor has also agreed to a six-month lockup period for the newly issued Class A ordinary shares, representing approximately 0.3% of Pinduoduo's post-issuance total outstanding shares. The transaction was priced with reference to the volume-weighted average price of the last five trading days and is expected to close on or about Dec. 24, 2020.
Pinduoduo expects to use the proceeds to strengthen its balance sheet and make strategic investments. The share issue follows an oversubscribed convertible note-and-equity offer last month, in which the company raised a total of US$6.1 billion, including overallotment.
"We see this as another vote of confidence in our vision of using technology for good," said Chen Lei, Chief Executive Officer of Pinduoduo. "There is huge potential for more digitization and technological innovation in the growing, transportation, and sale of food. It will ultimately benefit everyone because food touches everyone."
Pinduoduo operates China's largest online marketplace for agricultural products, with GMV for the category expected to hit 250 billion yuan this year, up from 136 billion yuan in 2019. The platform connects millions of farmers with its 731 million active buyers. Pinduoduo is the only major technology company in China to make improving agriculture a stated strategic priority.
Beyond widening downstream market access for farmers through e-commerce, Pinduoduo is investing in creating a lower-cost, next-day logistics infrastructure that is more suited to handling perishables as grocery shopping shifts rapidly online.
Pinduoduo is also investing in upstream agri-food technology that can help raise agricultural productivity and quality. The company is actively evaluating global investment opportunities in areas including alternative proteins, food safety and precision farming. It has a research collaboration with the Singapore Institute of Food and Biotechnology Innovation to develop a more cost-effective and robust method of testing fresh produce for pesticide residues.
To demonstrate the potential for agritech to improve agricultural productivity, Pinduoduo co-organized a strawberry-growing competition pitting teams of data scientists employing algorithms, intelligent sensors, and greenhouse automation against traditional growers. At the close of the four-month contest, which ended last month, the technology teams produced 196% more fruit by weight on average than the farmers.
The company is also helping promising startups explore how to deploy their smart agriculture solutions to working farms in China to scale their business and bring down the costs of implementation. It recently sponsored a global startup competition co-organized by the Food and Agriculture Organization of the United Nations (FAO) and Zhejiang University.
About Pinduoduo Inc.
Pinduoduo operates China's largest agri-focused technology platform, providing an online marketplace that connects millions of agricultural producers with consumers across the country. A pioneer of interactive commerce and the consumer-to-manufacturer model, Pinduoduo aims to bring more businesses and people into the digital economy so that local communities can benefit from the increased productivity and convenience through new market opportunities.
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Source: Pinduoduo Inc.