PE-backed Jiuxian approved to list on China’s New Third Board
Jiuxianwang E-commerce, a PE-backed Chinese e-commerce site that sells wines and spirits, has won regulatory approval to list on China’s over-the-counter (OTC) board.
Jiuxian was founded in 2009 and has raised approximately RMB 1.43 billion ($225 million) across seven funding rounds. Its most recent round was completed in July, when it received RMB500 million from Chinese asset management firm Min Xiang Wealth Management and other unnamed investors.
According to a regulatory filing, the company's revenue jumped from RMB865 million in 2013 to RMB1.58 billion last year, while its net loss narrowed to RMB287 million from RMB309 million in 2013. In the first three months of this year, the e-commerce platform reported revenue of RMB546 million. However, it still made a loss of RMB53 million.
Jiuxianwang started out as an e-commerce marketplace specializing in wines and Chinese baijiu, with operations centers in Shanghai, Guangzhou, Tianjin, Wuhan and Chengdu for delivery services. Last year, the e-commerce platform shifted to concentrate on O2O strategy, forming partnerships with 500 liquor makers as well as third-party online e-commerce platforms JD.com, Alibaba Group's TMall.com and Suning Commerce's Yigou.com.
YueKeung Winery provided RMB15 million in Series A funding in 2011 and this was followed by a RMB80 million Series B round from Sequoia Capital and Shenzhen Oriental Fortune Capital. In 2012, Rich Land Capital and China Renaissance committed RMB110 million, and then China Development Bank and other investors put in RMB300 million in August of last year.
The National Equities Exchange and Quotations (NEEQ), commonly known as the New Third Board, was initiated in 2011 as a pilot program in Shenzhen enabling high-tech focused private small and medium-sized enterprises (SMEs) to raise capital. It expanded into cities such as Shanghai, Tianjin and Wuhan two years ago and then the securities regulator united all the OTC markets and established NEEQ.
Listing requirements are less stringent than for other bourses: companies must simply have a clear shareholding structure and two years of financial statements.
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