July 01, 2021: -Chinese grocery delivery company known as Dingdong closed 2 cents higher in its U.S. IPO on Tuesday, after a 70% cut in the offering size.

The lackluster performance comes between an increase in Chinese stock listings in the U.S. and concerns about growth in the delivery industry of groceries. Tech giants such as Alibaba, Meituan, and JD.com have all significantly invested.

In its initial public offering, Dingdong is still gaining a market value of $5.5 billion. That is above double the value of Tencent-backed rival Missfresh, which fell above 25% in its Nasdaq debut on Friday.

This week, Dingdong disclosed it would price its IPO on the New York Stock Exchange at $23.50 a share, on the low end of the proposed range and less than 30% of the initial number of shares. Dingdong produced $95.69 million due to an offering that could have been large, around $357 million.

On Tuesday, Founder and CEO Liang Changlin told CNBC that he planned to use the IPO proceeds to expand the company in China and invest in technology and talent.

“We just finished a Series D round of funding, and everyone knows we produced 1.03 billion dollars,” he said in Mandarin. “So, from our perspective, the IPO itself is a milestone, and how much money that got raised isn’t that essential. We have adequate cash flow, and that is our situation.”

Liang has a 30% stake in the company.

Dingdong said in its prospectus it had 1.45 billion yuan in cash, cash equivalents, and restricted cash. With anticipated cash flows from financing activities, the company expected to meet its financial needs for at least 12 months, the company said.

SoftBank invested $330 million in Dingdong, after a $700 million investment a month earlier from Coatue and Sequoia Capital, according to advisor Cygnus Equity in May.

As Chinese consumer demand for delivery grows, Dingdong claims it can send fresh produce in about 30 minutes. The company’s strategy is to work out of warehouses rather than retail stores which need consumer-friendly interior design. Location can also add to costs.

Liang claimed Dingdong has grown an average of 300% a year for the past three years and was confident in “booming” demand for grocery delivery in China.

“If something becomes popular in a pandemic but fades when the pandemic is done, then it is not a good business,” he said. “Our price per order might have dropped a little, but the strength of orders is there. So we think the pandemic only accelerated our development,” for Dingdong, he added.