Deal focus: Vingoo to broaden its fresh offering

Customers used to be able to choose one of four fresh juices – banana, apple, pear and orange – from the vending machines installed by Vingoo Juice. There was even an option to add milk to the banana-based beverage. The business model proved unsustainable, due to the complexity and cost of machine maintenance. After three months, Vingoo began focusing solely on its best-selling product: orange juice.

Operated by Shanghai Giant Investment, Vingoo’s vending machines are stocked with whole oranges that are peeled, squeezed, and served in a cup within a few seconds. Customers can pay by cash or through their smart phones. The company, which has obtained 16 patents on its technology in China, monitors the supply and working condition of its machines remotely.

Vingoo recently secured a RMB400 million ($60 million) Series B round of funding jointly led by Legend Capital and Joy Capital, with participation from Yunqi Partners. Prior to that, it secured a Series A round worth RMB10 million from TrustBridge Partners.

“Having advanced technology is not our only strength. We have built a strong upstream supply chain, which has become the key differentiator between us and our competitors. We have been in the new retail industry for about five years. It will take time for new players to prove their business models work,” says Te Li, a branding representative at Vingoo.

This upstream supply chain includes a vending machine production facility in Shanghai and company-owned orange farms in Hunan province. Vingoo also has partnerships with farms in Egypt, South Africa, Australia and the US to import oranges. Its retail network now comprises more than 3,000 machines in subways, theaters and at tourist attractions in 176 cities across China. The company claims to serve more than four millions of cups of orange juice every month, each priced at RMB15.

“Driven by new technology, the business model has met the changing demands of young Chinese consumers and also established high-quality product supply chains between rural and urban areas. We believe the company will be a market leader thanks to its strong brand and supply chain,” Zhengyu Mao, founding partner at Yunqi Partners, said in an e-mailed statement.

With the new investment, Vingoo plans to place additional vending machines in different cities, with a view to growing its network to 40,000 machines by the end of 2018. It will also further develop the unmanned retail model to encompass other freshly-made products. For example, there are plans to develop vending machines that can offer fresh coconut juice and ice cream, as well as cashier-free convenience stores that sell fresh bread and cooked meals. 

“At present, most vending machines and unmanned convenience stores sell standard and packaged food and beverages. What we want to do is to show the full food-making process to customers, with high safety standards,” adds Li. 

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• Greater China
• Consumer
• Technology
• Early-stage
• China
• Legend Capital
• Agriculture
• TMT