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Tencent-backed fashion app is said to seek a US$4 billion IPO

[HONG KONG] Yet another Chinese technology company is headed for an initial public offering.

Meilishuo, the online fashion retailer backed by Tencent Holdings Ltd, is in talks with several investment banks about a US initial public offering that could value the startup at about US$4 billion, according to people familiar with the matter. The women-focused e-commerce company hosted a so-called bake-off to discuss IPO prospects with potential advisors and underwriters, the people said, asking not to be identified talking about private negotiations.

Meilishuo, which merged with rival Mogujie in 2016 to form a company with US$3 billion in sales, was said to have been valued at US$3 billion at the time of that deal. The company, whose name means "Beauty Talk," is one of the more popular fashion and cosmetics retailers online, a niche it's clung to despite the dominance of Alibaba Group Holding Ltd. and Inc. Meilishuo's envisioned US$4 billion valuation is an initial target and could change if a deal proceeds, the people said.

It's one in a growing wave of Chinese technology companies looking to sell shares to the public. Smartphone maker Xiaomi Corp. is seeking a valuation of as much as US$100 billion in a much-anticipated offering, people familiar with the matter have said, while Meituan Dianping, a Chinese food review and delivery giant also backed by Tencent, has begun discussions about a Hong Kong IPO at a valuation of at least US$60 billion.

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Meilishuo, which didn't respond to requests for comment, was said to have considered a U.S. as early as two years ago.

Meilishuo, founded in 2009, runs an online marketplace selling clothes, shoes and handbags. As of 2016, it had about 15,000 merchants on its website and a mobile application that had been downloaded 100 million times. That year, it merged with Mogujie, founded in 2011 with about 130 million registered users.