Hour-or-Less Grocery Delivery App Raises $450 Million

* Company said it will use money raised from its sixth fundraising round to shore up its supply chain, smart retail technology and the cold chain logistics network used to courier frozen goods.

* Plans call to expand number of warehouses to 10,000 in 100 cities, from the current 1,000-plus warehouses in 20 cities

(Beijing) — China’s largest fresh-produce delivery app has raised $450 million in its latest funding round, as more consumers seize the opportunity to have products that include fresh seafood and ice cream delivered in as little as 30 minutes.

The new investment in Miss Fresh was led by Goldman Sachs Investment Partners, the banking group’s investment arm, and social media giant Tencent Holdings Ltd., the company said in a statement.

The company said new funds, from its sixth fundraising round, will be used to shore up its supply chain, smart retail technology and the cold chain logistics network used to courier frozen goods.

According to Chinese consultancy firm iResearch, the revenue of China’s fresh produce e-commerce segment expanded 60% last year to 139.1 billion yuan ($20.4 billion), and will grow a further 40% this year.

Launched in late 2014, Beijing-based Miss Fresh allows consumers to have fresh fruits, vegetables, dairy products, meat and beverages delivered to their homes within an hour.

Miss Fresh said it plans to expand its warehouses to 10,000 locations in 100 cities in future, from the current 1,000-plus warehouses in 20 cities, including Shanghai, Beijing and Guangzhou. It didn’t offer a timeline.

Smaller grocery-delivery rival Hema Supermarket, backed by Alibaba Group Holding Ltd., is aggressively beefing up its offline presence. Opening its doors in 2015, Alibaba has 33 stores planned for the Beijing area alone by the end of this year from a current eight. It aims to have about 2,000 Hema stores open within the next three to five years.

A new entrant to the scene is supermarket chain giant Yonghui Superstores Co. Ltd., one of Forbes’ Fab 50 Asian companies in 2018.

Yonghui started to offer “30 minute” delivery (link in Chinese) in May, but only in Fuzhou, Fujian province, where its headquarters are. It now runs six warehouses in the southeastern city and aims to expand outside Fuzhou next year.

Contact reporter Jason Tan (jasontan@caixin.com)