We at FintekNews are just fascinated with the valuation game. Another company (Rubrik) just got a valuation of $1.3 Billion after raising a total of just under $300M and here we have Pinduoduo (PDD if you’re cool) that just raised only $100M BUT has a valuation of $1.5 Billion. Now PDD is more of a consumer thing, kind of Groupon meets Facebook, which certainly has a bigger upside potential, but still? Oh yeah, PDD was founded by an ex-Google engineer who left to go back to China and start this company. Guess his H1B visa ran out and he just had go become a billionaire back home.
“Pinduoduo, or PDD, is a kind of Facebook-Groupon mashup that Huang believes could revolutionize e-commerce. PDD just raised more than $100 million, according to people familiar with the matter, valuing the company at more than 10 billion yuan ($1.5 billion) less than two years after its founding. Huang, featured in the latest episode of the Decrypted podcast (subscribe here), is one reason China has created as many $1 billion startups this year as the U.S.
The idea behind PDD is simple enough. Typically shoppers know what they want before they get online. A person goes to, say, Amazon or Alibaba, plugs in a keyword and then picks out what they want after sorting through a few options or reviews. Huang’s idea is to give shoppers an experience more like spending a day at the mall with friends. You share ideas about what you like, get feedback from people you trust, maybe gossip a bit. Then, if you make purchases together, you get a discount.
It’s a twist on so-called social commerce, an idea that has been tried with little success in the U.S. For a time both Twitter Inc. and Facebook Inc. put buy buttons on the ads featured in a person’s newsfeed. The latter even offered a kind of currency called Facebook Credits. The tests were discontinued because most users don’t want to be solicited while hanging out with friends online…”