China’s top venture capitalist cuts stakes in Meituan and Pinduoduo

China’s prime enterprise capitalist has stepped up gross sales of stakes in three of his largest investments, which at the moment are among the many nation’s largest know-how corporations, as Beijing’s scrutiny of the sector ends in sweeping new laws.

Neil Shen, the pinnacle of Sequoia Capital China, has offered as a lot as $215m in shares within the fast-growing group buying app Pinduoduo, meals supply big Meituan and supply platform Dada Nexus.

His investments in Pinduoduo, which is New York-listed, and Meituan, which is listed in Hong Kong, have helped propel Shen to the highest of Forbes’ Midas Record as Asia’s most profitable enterprise capitalist for a number of years. The 53-year-old’s private web price is estimated to be $4.4bn.

“In China’s funding world, there’s Neil Shen after which there’s everybody else,” mentioned one admirer within the trade. “He’s the one one which’s been a banker, entrepreneur and investor, and that provides him an edge.”

Shen’s largest gross sales of inventory have been in Meituan, which was fined $530m for antitrust violations final month.

He offered about $100m of Meituan shares held by a household funding car and in his personal title on October 25. This adopted his sale of $55m of shares in September, which marked his largest private sale of shares on the time and second time promoting because the firm’s preliminary public providing, in keeping with filings in Hong Kong.

A Meituan driver makes a food delivery in Beijing
A Meituan driver makes a meals supply in Beijing. Neil Shen’s largest gross sales of inventory have been within the meals supply group © Greg Baker/AFP/Getty

Since founding Sequoia’s China arm greater than a decade in the past, Shen has constructed the VC agency into one in every of China’s most distinguished buyers. The group accomplished 96 offers within the third quarter, making it the world’s most lively fund, in keeping with CB Insights.

The funding spree for Sequoia Capital China got here at the same time as different worldwide funds hit pause throughout an unsure regulatory surroundings. Not too long ago, officers have moved to dismantle the schooling know-how trade, which had absorbed billions of {dollars} of funding, and halted the conveyor belt of Chinese language corporations heading to checklist in New York.

Chinese language president Xi Jinping launched a wealth redistribution marketing campaign in August that has prompted the nation’s tech giants to pledge ever-larger parts of their income to charity.

In September, Shen started to money out a few of his most useful shares, akin to these of Meituan and Pinduoduo, in what seems to be his first disclosed private gross sales of the corporate’s inventory. Sequoia put $370m into Pinduoduo over three non-public financing rounds beginning in 2017, paying a median of $1.22 a share.

Pinduoduo’s inventory was at $107 a share on September 8 when Shen and his household funding car initiated the sale of 280,000 shares price almost $30m, in keeping with Type 144s filed within the US. The ecommerce group’s shares are down from their February peak of $212.

Shen sits on Pinduoduo’s board and should proceed to carry shares within the firm. He didn’t reply to a request for touch upon his share gross sales.

Three of Pinduoduo’s prime executives, together with chair and chief govt Chen Lei, additionally offered shares in September, with every cashing in shares price about $7m of their first disclosed inventory gross sales because the firm’s 2018 itemizing, in keeping with Type 144 information analysed by Bradford Lynch-Levy on the Wharton College’s Forensic Analytics Lab.

“The Type 144 information present the one document of Chinese language govt share gross sales due to the SEC’s outdated disclosure guidelines for international issuers that permit executives of international corporations to successfully conceal their trades from buyers,” mentioned Lynch-Levy.

Pinduoduo didn’t reply to a request for touch upon the gross sales.

Shen in September additionally moved to promote as a lot as $30m of shares in Dada Nexus, a supply platform that connects corporations with couriers to ferry their items to customers.

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