Vision Fund leads $330m investment in China grocery platform

This brings the entire Series D to more than $1 billion, following a $700 million investment last month, led by DST Global and Coatue Management.

The company was established in 2014 and an online delivery platform was launched three years later. Dingdong uses a front-warehouse model, operating small warehouses in city centers instead of large facilities in suburban locations. This is intended to speed up the fulfillment process, with each warehouse covering a 3-kilometer radius and guaranteeing delivery within 30 minutes.

Another differentiator is that more than 85% of Dingdong’s fresh products are sourced directly from farmers as a means of quality control. The platform has 10,000 stock keeping units (SKUs) sources from over 20 territories around the world. It has more than 600 direct supplier relationships.

The company leverages digital management systems and algorithm-based sales forecasting in warehouse location selection, product selection, and procurement. It claims 90% accuracy in sales forecasting and a slow-moving inventory loss rate of 1%.

Dingdong originated in Shanghai and then entered other major cities such as Beijing, Shenzhen, and Hangzhou. It now has 1,000 front-end warehouses across 29 cities. Monthly revenue exceeds RMB1.5 billion with more than 800,000 daily orders from a base of over 30 million household users.

In addition to DST and Coatue, backers include Sequoia Capital China, Gaorong Capital, BAI, Capital Today China Group, and Starquest Capital. It was reported in February that Dingdong is working towards a US IPO later this year.

The company's direct competitors include Miss Fresh, which has a similar front-end warehouse model. Miss Fresh raised RMB2 billion ($305 million) in December from three Qingdao government-related funds. This followed a $495 million round in July.

China's overall fresh produce market has experienced explosive growth in the past year. All the country's major internet companies have entered the space, among them Alibaba Group, Meituan, JD.com, and Pinduoduo.

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