Chinese fresh produce retailer Benlai raises $200m

Shenzhen-based Mingde is also the largest shareholder of Shunfeng Express, China's largest private courier. Shunfeng's cold-chain logistics business, which Benali founder Huafeng Yu rates as the best in China, will provide support to the start-up.

In 2016, Benlai raised $117 million across Series C and extended Series C rounds to support the expansion of its cold chain logistics network. Investors include Shenzhen-listed home appliance maker Joyoung and CDH. The latter also committed around $40 million in Series A funding, together with Banyan Capital in February 2014. This was followed by a Series B round in 2015 from Dingxin, a Chinese agriculture and consumer-focused VC firm.

Benlai - its name translates from Chinese as "back to the original life" - operates a B2C marketplace, sourcing products from farmers and retailers all over China. It gained prominence thanks to Shijian Chu, a local entrepreneur. Previously director of state-owned Hongta Tobacco Group, Chu was arrested on corruption charges. He became an orange farmer on being released from prison in his 70s. Yu turned Chu's life story into a marketing campaign for Benlai.

Yu said in a letter published Tuesday that, following WeWork's trouble-hit IPO process, the age of raising capital to support loss-making businesses is over. Benlai turned profitable in the 2018 financial year and Yu expects it to generate RMB100 million ($14 million) in 2019.

The company now owns 400 brick-and-mortar stores that distribute products to customers living nearby who make orders through a WeChat mini-program. Yu emphasized the importance of having an offline presence, so as to reduce reliance on internet traffic.

Other start-ups in this space that have received VC funding include Tongcheng Shenghuo, which recently raised a $100 million Series B. The company sells fresh produce under a community group buying model - one of the key segments of social e-commerce.

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• Topics
• Greater China
• Consumer
• Early-stage
• China
• e-commerce
• CDH Investments Management