Dianping leads $30m round for China’s Farmlink
Farmlink, which operates a digital platform through which small and medium-sized restaurants in China can order food supplies, has received a $30 million in Series B funding led by listings and group-buying specialist Dianping.
According to certain local media reports, Sequoia Capital, which provided Farmlink's $8 million Series A round in March, also participated. The company received seed funding from China Renaissance K2 Ventures in August 2014, not long after the platform was launched.
Restaurants order their supplies through the Farmlink app and await delivery. The service is intended to be more convenient than using traditional procurement channels and also lower cost, because Farmlink can aggregate orders and buy in bulk. In addition, there is the potential for greater supply chain transparency.
Liu Yuan, the company's CEO, told China Venture that the new capital would go towards product development, supply chain optimization and geographic expansion. Farmlink started out in Beijing and Shanghai, and has ambitions to enter 35 major cities, including Guangzhou, Shenzhen, Hangzhou, Nanjing, Wuhan, Chongqing, Chengdu and Xi'an.
The objective is to become a large-scale food supply chain specialist with a similar model to North America-focused Sysco Corp. This company is the global leader in marketing and distributing food products to restaurants and hotels as well as healthcare and educational facilities. It generated sales of more than $46 billion in 2014, serving 425,000 customers from 194 distribution facilities.
Dianping, which recently raised an $850 million round from Tencent Holdings, FountainVest Partners and Temasek Holdings among others, already has exposure to the online-to-offline (O2O) food services space. It has invested in two online food-ordering platforms that connect take-out diners with restaurants - Meican and Ele.me.
Farmlink's business model is also broadly comparable with that of Huimin, which helps small supermarkets source goods from wholesalers at competitive prices through bulk buying. The company received a $100 million Series A round in February led by Fortune Capital.
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