BEIJING — Chinese grocery delivery company Dingdong closed 2 cents higher in its U.S. IPO Tuesday, following a 70% cut in the offering size.

The lackluster performance comes amid a surge in Chinese stock listings in the U.S. and concerns about growth in the grocery delivery industry, in which tech giants Alibaba, Meituan and JD.com have all invested significantly.

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

Earlier 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 with fewer than 30% of the initial number of shares. Dingdong raised $95.69 million as a result, versus an offering that could have been as large as $357 million.

Founder and CEO Liang Changlin told CNBC’s Eunice Yoon Tuesday he planned to use the IPO proceeds for expanding the company in China, and investing in technology and talent.

“We just finished a Series D round of funding, and everyone knows we raised $1.03 billion dollars,” he said in Mandarin, according to a CNBC translation. “So, from our perspective, the IPO itself is a milestone and how much money we 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 ($226.56 million) in cash, cash equivalents and restricted cash. Together with anticipated cash flows from financing activities, the company said it expected to meet its financial needs for at least 12 months.

The company said it operates in 29 cities in China, with a monthly average of 6.9 million transacting users in the first quarter and gross merchandise value (GMV) of 4.3 billion yuan. That’s up from 2.92 billion yuan in the same period a year ago.

GMV measures the total value of merchandise sold over a period of time.

However, Dingdong also disclosed a net loss of 1.38 billion yuan in the first quarter, up from 244.5 million yuan in the year-ago period.

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

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 during a pandemic but fades when the pandemic is over, then it is not a good business,” he said. For Dingdong, “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.”