Tencent snaps up a fifth of Chinese review service Dianping

Asian internet giant Tencent has taken a 20% stake in Dianping, a Yelp-like local review and rating service in China. Shanghai-based Dianping has a group buying service in addition to local merchant listing, online restaurant reservation, user reviews about food, restaurant, hotels, etc. The terms of the deal were not disclosed, however, local media reports the stake purchase is in the region of $400 million. After the deal, Tencent says it will integrate Dianping's user base, information about businesses, user reviews, group buying deals, and restaurant reservation services into its online messaging services - WeChat and QQ - and also with other Tencent products. This move by Tencent is to build an Online-To-Offline (O2O) ecosystem in China. The founding management team of Dianping, including CEO Tao Zhang, will continue to hold a controlling stake at Dianping. Also, the company will continue to operate independently under the current management team. In January 2014, Zhang sent an email to Dianping employees by saying that in the next two years, Dianping wants to become the TripAdvisor of hotel reviews in China. Note: TripAdvisor has a presence in China under the name DaoDao. Founded in 2003, Dianping has nearly 100 million active users across over 2,000 cities in China and has over 70% online traffic coming from mobile devices. It also has 30 million consumer reviews. In 2006, Dianping received $2 million in series A funding from Sequoia Capital. In 2007, Sequoia and Google invested $25 million in series B round. In 2011, Sequoia, TBP Capital, Qiming Venture Partners and Lightspeed Venture Partners invested a total of $100 million in series C round, and in 2012,  Dianping received over $60 million in series D round. Tencent's other investments Last week, China-based OTA 17u.cn received an investment amount of $82.5 million from Tencent, and few other investors. In January 2014, Tencent also invested in a Chinese mapping service Linktech Navi.