Hidden Hill leads $110m round for China's Baibu
Chinese B2B fabrics trading platform Baibu has raised $110 million in an extended Series D round led by Hidden Hill Capital, the private equity platform of logistics giant GLP.
Hong Kong apparel industry veteran Li & Fung Group - which was privatized by GLP last year - has come in as a strategic partner. Baibu will cooperate with GLP and Li & Fung across digital supply chains, intelligent manufacturing, and supply chain finance. The goal is to build China's largest vertical-integrated internet platform for the textile and apparel industry, according to a statement.
Founded in 2014, Baibu has made the transition from online marketplace to cloud-based consolidator of the country's fragmented factories. The initial offering was an online marketplace that connects fabric distributors and garment manufacturers, aggregating orders issued by the latter to the former. It cuts costs by eliminating layers of intermediaries and reduces information asymmetries by bringing demand closer to supply.
In 2019, revenue reached RMB10 billion and Baibu began moving upstream. The company established a cloud factory that has consolidated the power of many small textile factories and introduced a digitalization solution that improves manufacturers' fabrication efficiency.
Baibu raised a $300 million Series D round led by DST Global in December 2019. The Series C, which encompassed two tranches worth a combined $130 million, was completed the previous year. The company received angel and Series A rounds from Source Code Capital in 2015 and 2016, and then an initial Series B commitment of $10 million led by Chengwei Capital.
The cloud factory concept has gained traction in China, with Smart Fabric, Baibu's closest competitor, receiving a $100 million Series C round in 2019.
However, some industry participants have criticized the model. They claim a cloud factory is just an aggregated network of small production lines that does little apart from increase capacity. China is pursuing supply-side structural reforms intended to eliminate excess and backward production capacity, and the cloud factories appear to run contrary to this.
China Renaissance served as the financial advisor for Baibu's Series D.
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