Venture Capital: Beijing-based start-up Missfresh May Soon Nab $500M
The grocery delivery start-up is backed by Tencent Holdings Ltd.
The Covid-19 has boosted the fortunes of online grocery delivery start-up Missfresh. Locked-in families have stepped up their demand for groceries and fresh foods to be delivered at home amidst shelter-in-place restrictions. The online grocery sector, somewhat of an also-ran in the burgeoning e-commerce space, has now come into its own. According to a Bloomberg report, fundraising of $500 million by Missfresh is imminent. (Yahoo Finance)
Missfresh to bulk up against the competition
The latest funding will enable Missfresh to accelerate its expansion and hold its own against formidable competitors such as Ali Baba Group Holding Ltd (NYSE: BABA).
Missfresh received backing from China’s Tencent Holdings Ltd (HKG: 0700) during the country’s Internet boom. Other investors in the company include Goldman Sachs Group (NYSE: GS) and Tiger Global Management.
According to Bloomberg, Missfresh has closed on a funding tranche of about $ 300 million and another, denominated in Chinese currency, of 1 billion to 1.5 billion yuan ($ 211 million).
As of now, Missfresh is valued at about $3 billion.
Cumulatively, the company has raised about $ 900 million including investors such as Jeneration Group and Genesis Capital.
It is now looking to grab a larger share of the fast-growing Chinese online fresh food sector estimated to reach a size of $178 billion by 2025.
Missfresh launched operations in 2014. As of May last year it had nearly 25 million monthly active users. In 2018, it processed $1.5 billion worth of transactions and had turned cash-flow positive.
It boasts of more than 1,500 mini-warehouses.
The coronavirus caused a massive spike in demand for home deliveries of fresh fruit, food, and groceries.
Missfresh experienced a quadrupling in online grocery orders during the first five days of the Lunar New Year 2020 as compared to last year. As a result, vegetable supplies ran out every day during the first week of the New Year.
“Even though the virus outbreak brings a lot of challenges, it will also create opportunities for these online grocery startups,” says Richard Peng, founder of Genesis Capital, a Missfresh backer. “It’s fundamentally changing user habits, as they open up to the idea of buying groceries online.”
Related Story: The Virus Deals A Body Blow To Chinese Startups
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