Chinese online crafts platform raises $44m Series B

GX Capital and Yunmu Capital also came in as new investors, while existing backers Shunwei Capital, Xiaomi Ventures, and Haiquan Fund – an investment firm established by Chinese musician Haiquan Hu –  all re-upped. Those three investors, as well as two funds managed by Hangzhou Jinyuan Capital, provided Tongshifu’s RMB110 million Series A round in August 2017.

The company claims that its business model combines the internet, artistic innovation, and traditional manufacturing, and has achieved 100% annual revenue growth every year since its inception in 2013. Last year, revenue exceeded RMB250 million and it is expected to surpass RMB600 million in 2018.

Tongshifu more than doubled its production capacity following the Series A round but still fails to keep up with demand, with 80% of products pre-sold, the company said in a statement. The latest capital injection will be used to expand capacity still further and improve internal systems and processes. In addition, Tongshifu will consider new product lines in conjunction with companies in the Xiaomi ecosystem and investigate developing offline distribution channels.

Lanchun Duan, a managing partner at Cathay Capital, noted there is growing demand among Chinese consumers for attractive home furnishings, but few high-quality brands in the market. “Industry pain points are also business opportunities,” she added. “Tongshifu has cut into this market segment, winning customers with products that are premium yet affordable. At the same time, the company has leveraged its familiarity with internet channels to become the online leader for home accessories.”

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• Topics
• Greater China
• Early-stage
• Consumer
• Technology
• China
• TMT
• Cathay Capital Private Equity
• Xiaomi
• Shunwei Capital Partners