Sequoia, Perfect World back China online bookstore business
Sequoia Capital China has co-led a funding round for online reading business Zongheng Literature, working in tandem with Perfect World, the Chinese movies-to-gaming company that controls Zongheng.
The size of the investment was not disclosed but local media put it at around RMB800 million ($117 million). A statement posted on the company's official Weibo account said domestic fund-of-funds Shengjing, Share Capital, and China Prosperity Partners also took part in the round.
Zongheng was established in 2008 as a Chinese-language literature reading website under Perfect World. In 2013, it was sold to Baidu for RMB192 million, enabling the search player to consolidate its existing online reading platforms – including 91 Panda Reader and Duoku Reading – and Zongheng under Baidu Literature.
Last year, Perfect World took control of Baidu Literature in a deal worth approximately RMB1 billion and rebranded it as Zongheng. The business turned profitable last year and claims to be one of the three largest online reading platforms in China. Zongheng carries over 160,000 titles ranging from fictions to comics. Each day, there are visits from over 2.6 million internet protocol (IP) addresses and more than 60 million page views.
Qingsheng Zheng, a partner at Sequoia, said that high-quality original literature content will become more valuable. The GP plans to help Zongheng become a dominant player in the space. The new funding will be used to build a broader network of writers, create new content and attract more readers to the platform.
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