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GLP leads investment in Songxiaocai vegetables startup

COLDSKY.CN – Vegetables B2B marketplace songxiaocai.com raised 230 million yuan ($35.8 million) in a Series B1 round of venture capital investment led by GLP (普洛斯) and joined by IDG, Matrix Partners China(经纬中国), Puhua Capital (普华资本)and Index Capital (指数资本).

Yu Lingbing, CEO of the platform and also the former creator of Taobao’s rural e-commerce business, said Songxiaocai.com will upgrade the business and establish a fresh produce sales network this year.

Yu said the cooperation with GLP, a leading global provider of modern logistics facilities, will enable the startup to follow the business model centered on “order+ logistics+finance+ data”.

He added that the company’s gross profit margin will be increased through optimized matching among people, vehicles and goods. Authentic trade data will also make it possible to roll out more services to farmers and distributors, including financing, said Yu.

The company founded in 2014 in Hangzhou, Zhejiang Province offers comprehensive solutions ranging from searching information on agricultural products to purchasing, distribution and after-sales services.

From all available media reports, the company has actively advocated its core idea of a “reverse supply chain”, which is different from the reuse of products and materials and actually means providing products on the basis of market demand rather than trying to find customers with already existing products.

Yu said ” orders are received first to affect growing and production at the upstream production end, and this approach can greatly reduce operation costs.” (https://mp.weixin.qq.com/s/LM7-mEYszbFCc1pCOQwxxw) The company’s website says it has branches in Wuhan, Hangzhou, Beijing, Shanghai, Changzhou, Nanjing and Hefei, with sales orders from tens of thousands of medium and small-sized retailers.

On Aug. 21, a report by Zhejiang Online (https://zj.zjol.com.cn/news/730771.html?from=singlemessage&isappinstalled=0) told a detailed the story of how potato farmer Hu Zonglong in Anhui Province made a fortune and fame too with songxiaocai.com.

Influenced by his father, Hu has engaged in potato wholesaling in Shanghai since he was 18 years old. In 2016, he started to use Songxiaocai’s app to arrange deals. “The app serves as an agricultural Taobao and vendors don’t need to move from market to market because they can directly order products online.”

Songxiaocai.com now offers services in 45 cities and has reached an annual business volume of 200,000 tons of agricultural products, with 80 to 90 percent of goods coming directly from production sites.

The B2B platform received 30 million yuan in the angel round funding from Eddie Yongming Wu of Alibaba in January 2015, followed by 104 million yuan in Series A investment in March 2016 from IDG China, Puhua Capital and Wu’s Vision+ Capital (元璟资本) and 85.15 million yuan in Series A+ round in May 2016 from Yintai Holdings (银泰资本), Matrix Partners China (经纬中国) and IDG China.

GLP China, headquartered in Shanghai, operates in 257 properties in 38 cities, comprising 29.6 million square meters, according to its website.

Competitors:

meicai.cn, established in Beijing in June 6, 2014, says it’s the largest mobile e-marketplace for agricultural products in China, providing vegetables to millions of families and restaurants. The company’s website says it operates in nearly 50 cities, with 5,000 partners, and manages one million parcels daily. Meicai raised $450 million in a funding round led by Tiger Global Management and China Media Capital, Bloomberg reported on Jan. 11.

Fresh produce e-commerce platform yiguo.com founded in 2005 received US$300 million in Series D round funding, followed by investment from KKR. The startup says it buys products from 147 regions in 23 countries and already serves nearly 5 million families as well 1,000 enterprise clients.

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