VC-backed Chinese O2O retail platform pursues HK listing
Dmall, a Chinese O2O retail platform provider for traditional retailers backed by IDG Capital among others, has filed for a Hong Kong IPO.
The company raised USD 704.2m between its Series A and C rounds, with other investors including Tencent Holdings, CMB International, Hengan International Group, Lenovo Capital, Tianya Capital, and a government guidance fund representing Shenzhen’s Futian District.
The latest investment, a USD 51.8m Series C extension last November, valued the company at USD 3.9bn. This compares to USD 606m at the time of the Series A in 2017.
The largest single investment came mid-pandemic in November 2020, with Industrial Bank and China Structural Reform Fund leading a CNY 2.8bn (then USD 419m) initial Series C tranche. IDG has been the most consistent investor, having participated in each of the Series A, B, and C rounds.
IDG holds an approximately 12% stake across various vehicles. Tencent is the next largest external shareholder, although it has less than 5%. Wenzhong Zhang, Dmall’s founder, has a more than 50% position, according to a prospectus.
Dmall spun out from Chinese supermarket chain Wumart Group in 2015, with Zhang, who is also the founder of Wumart, teaming up with Feng Zhang, previously Wumart’s e-commerce lead.
Initially, the business model involved helping traditional offline retailers to fulfil orders made online. Within a year it switched to a more integrated offering with an end-to-end service. The company now claims to be China’s largest retail cloud services provider.
Revenue increased 44% during the 12 months ended December 2022 to CNY 1.5bn (USD 208m), most of which came from cloud-related services. These services help retailers simplify operations, improve efficiency, and integrate data across various aspects of their operations from online to offline.
During the same period, the company’s net loss narrowed from CNY 1.8bn to CNY 840.5m. The company said it expected this position to improve with decreasing logistics costs, growth in cloud revenue, and stable development of new marketing and advertising cloud services.
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