London-based online fashion retailer Farfetch has raised $250 million from Chinese internet giant Tencent and U.S. investment firm Dragoneer through a private placement of convertible senior notes, as the British company plans to expand into new markets including China, according to a statement released last week.

Each investor has agreed to purchase $125 million of the convertible senior notes, which can be converted into stock at the end of 2025.

The investment will help Farfetch increase the exposure of Western luxury brands to Chinese consumers through the Tencent-owned WeChat platform, the company said. Currently, the British online retailer partners with several mini-program operators to sell goods from more than 80 luxury brands such as Armani and Saint Laurent on the WeChat platform.

WeChat is China’s most popular social media platform with 1.15 billion monthly active users, and its mini programs are increasingly used by retailers to sell their products. A mini-program is different from an app as it allows users to directly and instantly use it on the WeChat platform without a separate download from an app store.

The deal follows several attempts by Farfetch in 2019 to increase its presence in China, including the merger of Tencent-backed JD.com's luxury arm TopLife into its China business.

The investment in Farfetch is also the latest effort by Tencent to penetrate into the luxury fashion sector. In November, Tencent established a partnership with British luxury brand Burberry to open a social media based retail store in Shenzhen in the first half of 2020. The two companies said the new venture would blend social media and retail to create a digital and physical spaces for local consumers.

Contact reporter Ding Yi (yiding@caixin.com)

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