Sinovation leads $40m Series B for China's Hua Juan

Existing investor Ventech China also participated in the round, according to a release. Hua Juan will use the new capital to expand the range of products available on its platform and to cultivate more relationships with online opinion leaders.

Hua Juan’s business model incorporates both online shopping and advertising. The company recruits online personalities, which it calls key opinion leaders, to record short videos for each product listed on the platform. In the videos, typically 1-3 minutes long, the hosts describe and promote the product according to guidelines provided by the company.

Hua Juan considers video to be key to appealing to its target audience, mostly female consumers from China’s tier 2-4 cities. These consumers tend to be less informed about fashion trends and new products than their counterparts in major cities and rely on salespeople and offline store experience to guide their purchases. Video promotions by trusted online personalities can make customers more comfortable with buying online.

Since its founding last year, Hua Juan has grown to over 100,000 registered users. In the first six months of 2017, the company recorded over 100,000 daily active users and a repurchase rate of 65%. Ventech was an early backer of Hua Juan, leading its 2016 angel round and following on with an undisclosed amount of Series A funding.

Sinovation invests in start-ups in China and the US, focusing on the seed, Series A and Series B stages. It mainly targets technology concepts including cloud computing, social networking, e-commerce, and consumer internet. Its China portfolio includes video communication services provider Xiaoyu Link and self-driving car technology developer Momenta.

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• Topics
• Greater China
• Technology
• Consumer
• Early-stage
• China
• TMT
• Sinovation Ventures
• Venture