CPE leads $123m round for China's Wangjiahuan
Shenzhen-based agricultural products distributor Wangjiahuan has raised RMB800 million ($123 million) in a Series B extension led by CPE.
Other backers include Shenzhen-based property developer Paul Run Group and local investment firm Ziming Capital.
Wangjiahuan secured RMB600 million in Series B funding in March 2020 led by online-to-offline services giant Meituan. Hidden Hill Capital - a private equity firm established by warehouse operator GLP - also took part. Hidden Hill invested RMB400 million in Wangjiahuan in 2018.
Founded in 1995, Wangjiahuan is a 2B service provider with annual revenue of nearly RMB10 billion. It has interests spanning crop cultivation, agricultural product processing and distribution, and catering services. The company has an agricultural production base of more than 130 million square meters and serves 20,000 large-scale corporate clients through distribution contracts with over 200 local food brands.
Wangjiahuan claims to have achieved 50% business growth in each of the last three years, despite disruptions caused by the COVID-19 outbreak. The key contributor is a franchise model - or partner model - launched in 2018. The company has signed up about 360 partners, of which more than 100 have doubled their sales since joining the network.
“Wangjiahuan has transformed from a traditional distributor into a technology platform. We have opened our supply chain resources to peer companies across the country,” said Jun Gao, the company's chairman.
Partners - typically small-scale distributors - rely Wangjiahuan's software-as-a-service (SaaS) platform and offline services. On the upstream side, they can leverage the company's upstream procurement network that aggregates orders, thereby bringing down costs; in the mid-stream, they can get better oversight on food quality and safety through Wangjiahuan’s tracing system; and in the downstream, they can use its distribution centers.
Wangjiahuan typically takes 1-1.5% of a partner’s revenue as a management fee, Binhua Xu, the company's general manager, said last December. Partners with liquidity issues might receive capital support on joining the network.
Taihe Capital served as the exclusive financial advisor for the Series B extension.
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