Chinese tech’s ‘Big Three’ BAT invested in agrifood deals worth $640m in 2019, a decline on 2018

Alibaba, Baidu, and Tencent – known collectively by the acronym BAT – pumped hundreds of millions of dollars into the agrifood vertical last year, according to AgFunder’s China AgriFood Startup Investing Report 2019, published with Bits x Bites.

Between them, they invested in agrifood startup funding rounds worth just over $640 million during 2019. This represents a substantial rowing back on their investments in the sector in 2018.

That year, Tencent and Alibaba alone accounted for $2.7 billion in Chinese agrifood startup funding – almost half the sector total. They were the second and third most active investors in the space, respectively, by number of deals, with only Matrix Partners making more investments.

However, 2018 was characterized by several outsized deals that boosted these numbers. These include Meituan Dianping’s $1.5 billion pre-IPO raise, which Tencent participated in. The Shenzhen-based tech giant also joined a $450 million round for e-grocer MissFresh, while Hangzhou-based Alibaba pumped $280 million into its rival 1919.cn (it also paid an estimated $9.5. billion to acquire Meituan’s food-delivery competitor Ele.me).

Despite a lower investment figure overall, 2019 still saw several big startup deals involving the three BAT tech giants.

Baidu has fallen behind its two rivals in recent years, with Meituan and NetEase pulling ahead of it in market cap terms. Nevertheless, it remains an active player in startup investment – including in agrifood, where its 2019 deals highlighted its differing strategic priorities when compared to Alibaba and Tencent.

While the larger two focused on downstream, consumer-facing investments in 2019 – particularly in AgFunder’s eGrocery category – Baidu backed two upstream startups in the Farm Management Software, Sensing, & IoT category, reflecting its pivot away from being an internet-centric player towards artificial intelligence and related technologies.

Here are the BAT firms’ 2019 agrifood startup investments in China:

Alibaba

• Shi Hui Tuan (eGrocery) –  Also known as Nice Tuan, this group-buying platform for fresh produce raised $88.3 million in its Series A round from investors including Alibaba, China Growth Capital, Joy Capital, and ZhenFund.
• Ubox (In-Store Retail & Restaurant Tech) – Alibaba’s financial technology and services affiliate, Ant Financial, led the $224 million late-stage investment in this operator of internet-enabled vending machines.
• Tianxianpei (eGrocery) – This online-to-offline marketplace specializing in dairy products closed a $14 million round in November.

Baidu

• Joyvio Tianhe (Farm Management Software, Sensing, & IoT) – A developer of artificial intelligence solutions for the pig-breeding industry, this startup – incubated by the food-focused Joyvio Group – raised an undisclosed amount of Series A funding in December.
• McFly Technology (Farm Management Software, Sensing, & IoT) – Backed by Baidu Ventures among others, this company combines data analytics collected by drones with plant protection expertise. It banked $14 million in its March Series A round.

Tencent

• Lehe Food (Agribusiness Marketplaces) – This Guangzhou-based platform runs the gamut from farm management and fresh food processing through to distribution, cold chain logistics, and tech consulting. It raised $14 million at Series B.
• Rou Lian Bang (eGrocery) – Meituan also invested in this fresh food marketplace’s Series B round, which closed in December for an undisclosed amount.
• Shi Xiang Hui (eGrocery) – Based in Wuhan, this food e-commerce and content platform banked $1.4 million for its Series A round.
• Yipin Fresh (eGrocery) – Meituan affiliate Longzhu Capital joined Tencent in this ‘smart retail’ startup’s $280 million Series B round last March.