Chinese online grocery startup MissFresh raised $495 million in its latest funding round, illustrating investors’ confidence in a cash-burning industry that requires complex cold chains and fast logistics, a source close to the deal told Caixin.
The financing round, which was led by a fund operated by China International Capital Corporation subsidiary China Capital Investment Group, gives MissFresh a valuation of more than $3 billion. Other investors included Tencent, ICBC International, Tiger Global, and Abu Dhabi Capital Group.
Six-year-old MissFresh is a forerunner in adopting the strategy of storing fresh food in mini-warehouses adjacent to residential communities in an effort to ensure home deliveries within one hour.
Apart from its own app, MissFresh acquires customers via partnerships with social media platforms like Tencent’s ubiquitous WeChat app, with advertisements on its main social media feed.
“Currently, half of our new customers come from mini programs embedded in WeChat,” MissFresh chief financial officer Wang Jun said.
To some extent, this social media-based business model differentiates MissFresh from Alibaba’s rival Freshippo supermarket chain, which provides a similar delivery service.
MissFresh’s new funding comes as the coronavirus pandemic led to a surge in demand for fresh food deliveries. According to research firm QuestMobile, China saw 11.6 million more monthly active users of online grocers in May compared with the same period in 2018.
Contact reporter Ding Yi (email@example.com)