MEICAI, a Chinese startup that connects restaurants with vegetable producers, is considering shifting its initial public offering (IPO) to Hong Kong from the United States after China’s regulators recently have made some changes to overseas listings, people with knowledge of the matter said.

The Beijing-based company is starting preparations for a Hong Kong listing, said the people. The startup could raise several hundred million dollars in an IPO, one of the people said. Meicai confidentially filed for a U.S. share sale earlier this year, Bloomberg reported in May.

Meicai would join on-demand logistics and delivery firm Lalamove in weighing a listing venue switch amid the fallout from the US$4.4 billion U.S. IPO by China’s Didi Global Inc.

Chinese regulators barred Didi’s software from local app stores and said companies with more than 1 million users’ data will need to submit to a cybersecurity review for overseas listings.

Deliberations are still ongoing and Meicai could decide to proceed with its U.S. listing plan later, the people said. A representative for Meicai declined to comment.

Meicai, whose name means “beautiful vegetable” in Chinese, was founded in 2014 by rocket scientist Liu Chuanjun. Using a smartphone app, restaurant owners in China can order fresh produce such as bok choy and Sichuan peppercorns directly from farms, disrupting traditional wholesaling by cutting out middlemen. The company said it serviced more than 2 million restaurants in over 300 Chinese cities as of the end of 2020.

Meicai, which counts Tiger Global Management, Hillhouse Capital and GGV Capital among its backers, raised about US$800 million in 2018 for a post-investment valuation of US$7 billion.

More funding is needed for the startup as fresh-produce sourcing heats up. Chinese local services leader Meituan has bet on the segment to drive growth and anchor its food delivery and restaurant management business. Sequoia China-backed Shuhai Supply Chain, a startup specializing in logistics for restaurants’ ingredients and produce, is also a competitor.

(SD-Agencies)