(Recasts with IPO size, valuation and other details)
June 9 (Reuters) - Chinese grocery app Dingdong Maicai, backed by investors including Sequoia Capital and Tiger Global Management, aims to raise around $500 million in its U.S. IPO to compete in a crowded sector, three people with direct knowledge of the matter told Reuters.
The company filed for the IPO on Tuesday but did not give any details of the size of the isssue or valuation.
Dingdong is targeting a valuation of at least $6 billion in the offering, said two of the people, who declined to be named as the information is confidential.
A valuation target however has not been finalised and could change depending on market feedback, they cautioned.
Dingdong plans to open books for the IPO in two weeks and a listing could take place as early as the end of June, said two of them.
Dingdong Maicai did not immediately respond to a query for comment.
The COVID-19 pandemic has fueled online demand for fresh produce in China, with e-commerce companies including Dingdong, Alibaba Group and Pinduoduo competing aggressively to grab a major slice of that vast market.
One of Dingdong’s competitors MissFresh, backed by Tencent Holdings, also filed for a U.S. IPO on Tuesday.
Established in 2017 in Shanghai, Dingdong operates mainly in first-tier cities such as Shanghai, Beijing, Shenzhen, and Hangzhou.
Last month, the company raised $330 million, in a funding round led by SoftBank Vision Fund, bringing its total fundraising to over $1 billion.
The latest round valued the company at $5.1 billion, said one of the people. A year ago, Dingdong was valued at $2 billion in a $300 million funding round, Reuters reported at the time.
Dingdong plans to list its shares on the New York Stock Exchange under the symbol “DDL”, according to the company’s filing.
Morgan Stanley, BofA Securities, Credit Suisse and Mission Capital are underwriters for the offering, Dingdong said. (Reporting by Kane Wu and Scott Murdoch in Hong Kong; Additional reporting by Ankit Ajmera in Bengaluru; Editing by Anshuman Daga and Stephen Coates)