PatPat raises $510m across Series C, D rounds
PatPat, a Chinese-founded children’s wear brand that claims to be the world’s largest direct-to-consumer (DTC) player in its segment, has raised $510 million across two rounds of funding.
The company’s Series C was led by Capital Today China Group, General Atlantic, and the wealth management unit of CDH Investments. They were joined by SIG, Ocean Link, and Ince Capital. DST Global led the Series D, which also featured GGV Capital as well as additional commitments from General Atlantic and Ocean Link. The sizes of the individual rounds were not disclosed.
The investment was described in a statement as the largest single financing round in the cross-border e-commerce space, giving PatPat unicorn status.
The company was established in 2014 and received funding from IDG Capital the same year, AVCJ Research’s records show. SIG invested in 2017, and then Sequoia Capital China led a RMB300 million ($48 million) round in 2018. IDG and SIG re-upped, while FreesFund came in as a new investor.
PatPat’s three founders, Albert Wang, Ken Gao, and Meng Hu, are all graduates of Carnegie Mellon University who went on to work for the likes of Oracle and Amazon. The company is headquartered in Silicon Valley and has offices in Shenzhen, Guangzhou, Hangzhou, and Foshan, as well as in San Francisco, Los Angeles, Dublin, and Manila.
PatPat claims users in more than 100 countries and regions, and it ranked first in the e-commerce category and ninth overall among Chinese overseas social media platforms in the final quarter of 2020, the statement adds.
The company emphasizes operational efficiency, with a self-developed end-to-end supply chain that uses big data and artificial intelligence (AI) to track fashion trends and conduct data analysis. This feeds into product development, design, sales forecasting, and other functions.
“Leveraging China's strong supply chain capabilities and catalyzed by the pandemic, B2C cross-border e-commerce is growing at an unprecedented rate,” said Eric Xu, a managing partner at GGV. “PatPat aspires to be a leader in marketing, customer acquisition, product offering, supply chain management, and customer service, undertaking challenging tasks in the correct way.”
GGV is also an investor in Wish, a cross-border e-commerce platform that raised $1.1 billion through a US IPO in late 2020. It connects Chinese merchants who primarily sell products through domestic channels like Alibaba Group’s Taobao and Tmall with consumers in the US and Europe. Another portfolio company, Xiao Hong Shu, started out by helping Chinese consumers buy overseas brands, but has since broadened its offering.
Other recent investment activity in this space includes a RMB100 million Series B for OrderPlus led by Cathay Capital and a JPY5.3 billion ($48m) investment in Inagora from SBI holdings, pharmacy chain Sugi Holdings and Xinjin Holding, the cross-border alternative investment arm of CITIC Group. Inagora operates an e-commerce platform that sells Japanese premium goods to Chinese customers.
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