Temasek-backed China grocery app raises US$2b in new funding round: Sources

The fund-raising comes as demand for grocery delivery in China has surged over the past year. PHOTO: REUTERS

HONG KONG (REUTERS) - Chinese community grocery shopping app Xingsheng Youxuan has raised about US$2 billion (S$2.65 billion) in a new funding round that values the company at US$6 billion prior to the fresh capital injection, three people with knowledge of the matter told Reuters.

Private equity firms FountainVest Partners, Primavera Capital Group and KKR & Co are among investors in this round, two sources said. Internet and gaming giant Tencent Holdings, which is an early backer of Xingsheng Youxuan, also invested in this round, one of them said.

The fund-raising, signed just before the Chinese New Year, was led by Sequoia Capital China and has also attracted property developer China Evergrande Group and Singapore's investment company Temasek, said a separate person with direct knowledge.

Xingsheng Youxuan's spokesman Li Hao declined to comment when contacted by Reuters. Representatives for Sequoia China, FountainVest and Tencent declined to comment. Primavera, KKR, Temasek and Evergrande did not immediately respond to queries for comment.

All the people declined to be named as the information has not been publicly announced.

The fund-raising comes as demand for grocery delivery in China has surged over the past year as more consumers order from the comfort of their homes due to Covid-19 social distancing restrictions.

However, regulators said last December that they would tighten oversight of the community group buying sector, which allows groups of local residents to get discounts by buying together in bulk, urging Internet giants not to compete for market share with unreasonably low prices.

Headquartered in central China's Hunan province, three-year-old Xingsheng Youxuan delivers online bulk orders to offline grocery stores located inside or near residential communities.

It now runs the service in 13 provinces and municipalities, covering more than 6,000 counties and over 30,000 towns, according to its website.

With more than eight million daily orders, Xingsheng Youxuan estimated it had a gross merchandise value of 40 billion yuan (S$8.2 billion) in 2020, the website said.

In December, Chinese e-commerce retailer JD.Com said it would invest US$700 million in the company.

Xingsheng Youxuan's investors also include United States investment firm Tiger Global Management, according to its website.

Join ST's Telegram channel and get the latest breaking news delivered to you.