Warburg Pincus invests $100m in China B2B platform Yijiupi
Yijiupi, a China-based online B2B trading platform that established itself in liquor before expanding into other consumer goods categories, has raised 100 million in an extended Series D round from Warburg Pincus.
The company closed its Series D at $200 million five months ago, with participation from the likes of Tencent Holdings, Meituan-Dianping, Source Code Capital and China Everbright. The valuation is said to have been $1.1 billion.
It is also the latest of a string of investments in Chinese B2B trading platforms as investors bet on the potential of digitization to bring efficiency and pricing transparency to the more fragmented segments of the economy. The likes of Yi Shou and Baibu - both of which have received funding in recent months - are expected to become as significant in the apparel and textiles verticals, respectively, as Pinduoduo has in broader B2C e-commerce.
Yijiupi will use the new capital to broaden its geographical coverage, introduce more consumer goods categories, and advance its technological development, according to a statement.
The company started in 2014 as a liquor trading platform for bar and restaurant owners. It broke into more fast-moving consumer goods (FMCG) categories last year and now also offers baby care products, daily necessities, snacks, and non-alcoholic beverages.
Yijiiupi aggregates orders from multiple buyers and secures discounts from manufacturers because it purchases in bulk. It makes money through pricing arbitrage. If customers went through normal channels, passing orders through several regional and local liquor distributors, each of which takes a cut, their costs would be higher. In addition to consumer goods, Yijiupi provides supply chain finance, warehousing, and logistics services.
It claims to have achieved RMB13 billion ($1.9 billion) in gross merchandise volume (GMV) and issued RMB8 billion in loans to merchants for 2018.
“We are very bullish on industrial internet companies in China as they integrate and link modern technologies including big data, analytical tools and wireless networks with professionals working in different industrial verticals, improving significantly the operational efficiency of these segments. We are going to continue to focus and invest in companies in this field after Yijiupi,” said Lei Zhang, a managing director at Warburg Pincus, in a statement.
Yijiupi raised its first round from Bertelsmann Asia Investments (BAI) in 2014. A Series B of RMB200 million came a year later from Greenwoods Investment, Lighthouse Capital and Source Code, in addition to BAI. In 2016, the company accepted a further RMB241 million from Source Code, Genesis Capital, Meituan-Dianping and Eastern Bell Venture Capital. Several of these investors re-upped later that year in a $100 million Series C that also featured HG Capital.
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