China's Yonghui gets $153m for fresh produce spin-out

Tencent and CICC will own stakes of 4% and 0.67% following the round, according to a statement. Yonghui is also participating but its stake in Caishixian will be diluted from 35% to 32.3%. Meanwhile, Hillhouse Capital’s holding will fall from 30% to 26.8% and Sequoia Capital China will go from 15% to 13.4%.

Yonghui, which is well known for its fresh produce, launched Caishixian in 2015 as a B2B service platform focusing on a safe, efficient, and reliable food supply chains. It sources high-quality ingredients and delivers them to restaurants as well as canteens at companies, schools, and universities. Hillhouse and Sequoia first backed the company in 2018.

Caishixian recorded revenue of RMB3.2 billion in 2019 and RMB3 billion for the first nine months of 2020. Its net loss was RMB369 million in 2019 and then RMB284 million in the first nine months of 2020.

As a traditional player, Yonghui has launched several new business lines this year amid fierce competition in the fresh produce field. The company now takes orders via app and makes deliveries through community-based mini-supermarkets.

Yonghui recorded revenue of RMB50 billion for the first six months of 2020, up 22% year-on-year, while net profit rose 35% to RMB1.8 billion. Fresh produce was the key driver, increasing 27% year-on-year to RMB23 billion. Revenue from e-commerce came to RMB4.5 billion, a gain of 243%. It now accounts for 9.7% of overall sales.

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• Topics
• Greater China
• Expansion
• Consumer
• Tencent
• CICC
• e-commerce
• TMT