China’s largest on-demand startup reportedly raising up to $3B at $20B valuation led by Tencent

China’s largest online provider of on-demand services, Meituan-Dianping, is reportedly raising up to $3 billion in fresh funds, with Tencent expected to throw in $1 billion of it, according to a report by The Wall Street Journal on Monday.

Tencent is an existing investor in restaurant-review website Dianping (akin to Yelp), which merged with group-buying website Meituan (think Groupon) last month in a deal said to be worth $15 billion.

Bloomberg caught wind of the deal on October 19, though at the time the amount Tencent was looking to invest had not yet been reported.

China’s ecommerce leader Alibaba is the other notable player with skin in the game, having backed Meituan prior to the merger. The situation is reminiscent of the Didi Dache-Kuaidi Dache merger that birthed the country’s dominant taxi-hailing app, Didi Kuaidi, earlier this year.

Didi Kuaidi has since gone on to raise $3 billion at a $16 billion valuation in September. (Tencent and Alibaba were also the main investors in Didi and Kuaidi pre-merger.)

If Meituan-Dianping is indeed set to close up to $3 billion in funding, it would leave the online-to-offline (O2O) services startup valued in the region of $20 billion, according to WSJ (the earlier Bloomberg report did not mention a post-money valuation).

That would trump taxi-hailing app Didi’s most recent valuation and make it one of China’s most valuable startups behind smartphone maker Xiaomi, which is now said to be worth about $46 billion.

Both Alibaba and China’s Internet search giant Baidu are investing billions in their O2O service push, and it will be interesting to see if Alibaba comes back for more alongside Tencent in this rumored round (though, as yet, neither Bloomberg nor WSJ have hinted at Alibaba doing so).

We’ve reached out to Tencent for comment and will update you if we hear back.