The Groupon and Yelp of China just merged

Inside China's Silicon Valley
Inside China's Silicon Valley

China's versions of Groupon and Yelp have joined forces in a mega tech merger.

The startups, Meituan and Dianping, offer online-to-offline services that allow users to make lunch reservations, buy weekly groceries or order takeout from a mobile app.

The combined company could be worth $15 billion, according to state media. The merger is even more notable because Meituan and Dianping are backed by two of China's largest tech companies: Alibaba (BABA) and Tencent (TCEHY).

The new firm will be jointly led by the CEOs of both companies, Wang Xing and Zhang Tao, and major decisions will be vetted by them and the board.

This deal isn't the first time companies backed by Chinese rivals Alibaba and Tencent have teamed up. Earlier this year, two taxi-hailing apps -- each backed by one of the big tech firms -- merged to create a giant competitor to Uber.

China is a fast-growing tech and e-commerce hub, hatching both big firms and nimble startups hawking everything from eBay-like services to smartphones. The country is also increasingly connected, with 650 million Internet users. About 80% of those users are surfing the web on smartphones and tablets.

But not everyone has been able to get in on the game. Many foreign tech firms have found it difficult to operate in China -- some, such as Facebook (FB), Twitter (TWTR) and Google (GOOG), are even blocked by government censors.

Homegrown services have sprung up to fill the gap -- Baidu (BIDU) is a top Chinese search engine, while Sina's (SINA) Weibo is a Twitter-like microblog.

-- Steven Jiang and Felicia Wong contributed to this report.

CNNMoney Sponsors