Chinese social commerce platform Pinduoduo Inc. is now a public company — with a market capitalization of nearly $30 billion to boot.
The company completed its initial public offering on Thursday, raising $1.63 billion.
Even better news for the Chinese social commerce platform company was the 40.5 percent pop in shares on its first day of trading. The stock closed at $26.70 on the Nasdaq sending its market cap to $29.6 billion. Founder Colin Zheng Huang holds about a 46.8 percent stake in the company, now valued at $13.8 billion.
Pinduoduo shares were priced at $19, the high end of its initial pricing range. The shares actually began trading on the Nasdaq market at $26.50, with nearly 43.1 million shares changing hands by the end of the day’s trading session.
The $1.63 billion raised makes Pinduoduo the second-largest float in the U.S. by a Chinese firm this year. The Chinese video-streaming service iQiyi Inc. completed its IPO in March on the Nasdaq, raising $2.42 billion. Come October, Pinduoduo will probably need to cede its position to become the third largest Chinese firm to float this year because that’s when Tencent Music Entertainment, the largest music-streaming firm in China, is slated to hit the public markets. Tencent Music is aiming to raise up to $4 billion in its IPO.
Pinduoduo’s differentiating factor in e-commerce is that its model allows consumers to buy as a group to receive better discounts on what they buy. Vendors on the site sell everything from apparel to home goods.
Because its items are inexpensive, it’s been dogged by rumblings that its goods lack quality and maybe even are counterfeits. One individual, who lives in China and is familiar with the site, said the company earlier this year began taking steps to keep a better watch on the goods it sells and their point of origin.