VCs exit China online furniture retailer Meilele to strategic buyer

According to a regulatory filing, Yihua Timber will purchase 11 million shares in Meilele from existing shareholders at $6 apiece. Lightspeed will sell 4.55 million shares worth $27 million, while Vertex will get $16 million for 2.6 million shares. K2 Ventures is set to receive $20 million from the sale of 3.4 million shares. Another investor, Ace Investments International, is offloading 402,543 shares for $2.4 million.

In addition, Yihua has further acquired 2 million new preferred shares issued by Meilele at $9 each. The Shanghai-listed company has invested a total $84 million, becoming the largest shareholder in the online retailer.

Meilele started out as a store within Taobao, Alibaba Group's C2C e-commerce platform in 2008. It soon set up its own B2C platform and this was subsequently complemented by an offline presence. The company now has a few hundred showrooms in about 200 Chinese cities, allowing customers to sample the goods before buying them as well as offering home design and renovation services.

Meilele has received three rounds of VC funding and issued a convertible bond, according to AVCJ Research. K2 and Lightspeed provided angel and Series A rounds, and these were followed by a $40 million Series B in 2012 led by Vertex and also including Lightspeed, K2, LionRock Capital and KTB Securities China.

In 2013, CDIB Capital invested $25 million in the company, of which $19 million was structured as a subscription to a convertible bond. China-focused Vision Kight Capital Partners is also among the investors in Meilele.

Two months ago, Shenzhen-listed Dongyi Risheng Home Decoration Group acquired a 2.25% stake in Meilele for $12.8 million. As of the end of March, Meilele had net assets of RMB103 million ($16 million). Last year, it generated RMB128 million in revenue, while posting a net loss of RMB13 million.

Yihua Timber said that two companies will share resources and build an online sales platform. The listed company manufactures and sells wood flooring and furniture products worldwide. It reported revenue of RMB4.43 billion last year, up from RMB4 billion in 2013. Its net profit was RMB525 million in 2014, compared with RMB408 million a year earlier.

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• Topics
• Greater China
• Exits
• Consumer
• Technology
• China
• Exit
• TMT
• Lightspeed Venture Partners
• Vertex Management (II)
• Trade sale
• Consumer