Shunwei leads round for Chinese apparel platform Yi Shou
Shunwei Capital, a VC firm established by Xiaomi founder Lei Jun, has led a RMB55 million ($8 million) Series B round for B2B apparel sourcing and wholesaling platform Yi Shou.
Other participants include Matrix Partners China and Huaxing Growth Capital, the flagship private equity arm of China Renaissance. Shunwei also backed the company’s Series A round in 2017.
Founded in 2014, Yi Shou manages over 100 full-time buyers, who select apparel products from different channels and then upload photos of the clothes to the company’s app. Retailers with similar inventories form groups to realize economies of scale when making orders.
After receiving an order, Yi Shou makes purchases from different wholesale markets and delivers the clothes to the customers. This business model targets a market of 3.9 million small to medium-sized offline clothing retailers across China.
Yi Shou mainly generates revenues from charging customers commissions and service fees. The company claims to have generated RMB100 million in average monthly revenue during 2018. It has over 10,000 suppliers, which are said to cover most clothing wholesale markets in China.
“We are bullish on the disruption Yi Shou can bring to China’s apparel industry. The company is one of the few internet companies that understand the apparel industry well in China,” said Tian Cheng, a partner at Shunwei.
Interest in Chinese B2B platforms that introduce modern technologies to traditional industries has been on the rise, with the segment expected to support a number of start-ups worth more than $1 billion. Most platforms have adopted a similar business model, which is to aggregate customer demand and then source the goods from upstream suppliers.
Investment in this space reached RMB21.2 billion for the first half of 2018, up 60% year-on-year, according to local e-commerce news portal 100ce. In November, Baibu, a B2B trading platform for textiles and fabrics, received $100 million in a second tranche of Series C funding led by Tiger Global Management.
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