Source Code leads $31m round for China B2B liquor platform
China-based B2B liquor-trading platform Yijiupi has received RMB200 million ($31.3 million) in a Series B funding round led by Source Code, a VC firm created last year by Yi Cao, formerly of Ceyuan Ventures and Sequoia Capital.
Greenwoods Asset Management and Bertelsmann Asia Investments participated in the round alongside Lighthouse Capital, which also served as financial advisor. The investment is said to value Yijiupi at more than RMB1 billion.
Set up in September 2014 by Shengqiang Chen - who currently holds the title of COO - the company serves as an information source and purchasing platform for bar and restaurant owners. BIA provided Series A funding a few months after launch, according to local media.
The business model is one of classic supply chain disruption. Bulk liquor orders are typically processed through several regional and local distributors but Yijiupi connects buyers with suppliers. By aggregating orders from multiple buyers, the company achieves greater bargaining power and lower prices.
Chen said the new funding would be used for business expansion, handling larger orders and improving the company's technology platform. Yijiupi wants to broaden its service coverage from the current 15 provincial-level capitals to include all major urban centers in China, build up a larger base of liquor suppliers, and establish commercial relationships in the international wine market.
A number of B2B start-ups have emerged in China with a view to helping small companies source goods from wholesalers at competitive prices through bulk buying. Earlier this year, Huimin and Farmlink - which focus on supermarket and restaurant chain customers, respectively - both received venture capital funding.
Source Code has $360 million and RMB450 million under management across US dollar and renminbi strategies. Anchor LPs include Sequoia, Xing Wang, the founder and CEO of Meituan, and Yiming Zhang, who set up Toutiao.com, Kuxun.cn, fanfou.com and 99fang.com.
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