Dingdong Maicai, an e-commerce platform for fresh fruits and vegetables, has raised $1.03 billion in Series D funding across two tranches.
Last week, Cygnus Equity, an investment bank that advises Dingdong Maicai on fundraising and is itself an investor in the startup, said the Shanghainese e-grocer had secured $330 million in a “Series D-plus” round led by SoftBank‘s Vision Fund.
This followed a $700 million Series D injection last month which was co-led by US investment giant Coatue Management and London-based internet investor DST Global.
Other international investors participating in that round included Sequoia Capital, Tiger Global Management, MassAve Global, and General Atlantic. APlus Partners, Aspex Management, 3W Fund Management, Capital Today, CMC Capital, Ocean Link, and Lenovo-affiliated Hony Capital were among the Greater China-based investors to take part in the round.
In an announcement on social messaging platform WeChat, Dingdong Maicai said it will use the funding for regional expansion, enhancement of its supply chain capabilities, and to hire more personnel.
The online-to-offline platform sources fresh produce from farmers and agribusinesses and delivers it direct to consumers, who can order groceries via a mobile app. According to local newspaper 21st Century Herald, Dingdong Maicai handles 900,000 orders each day, clocking monthly revenue of ¥1.5 billion ($233 million). It operates around 1,000 warehouses across 27 of China’s biggest cities.
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In its WeChat statement, it said it “strives to move closer towards the source of ingredients and agricultural production,” to bring greater efficiencies to the fresh produce supply chain, maintain high quality standards, and to “allow consumers to eat fresher and safer food.”
Dingdong Maicai added that it will continue in its efforts to “promote modern planting and breeding industries” and to encourage “modern agricultural development and rural revitalization” throughout China.
According to AgFunder and AFN‘s China 2021 Agrifood Startup Investing Report, the ‘eGrocery’ category – comprising companies selling produce and other groceries online and delivering them to consumers – raised $3.6 billion in total last year, making it the country’s single highest-funded category. [Disclosure: AgFunder is AFN‘s parent company.]
But while it dominated in dollar terms, eGrocery saw just half the number of deals it did in 2019. This points to the relative maturity of the category compared to others in China, with investors answering the high capital demands of more established players. Among these are Dingdong Maicai and key competitors like Missfresh — which is backed by Goldman Sachs and Tencent and raised over $800 million in funding last year — as well as ‘super app’ Meituan‘s grocery service Meituan Maicai, Pinduoduo‘s Duo Duo Maicai, and Alibaba‘s tech-enabled supermarket chain Hema. Several of these larger e-grocers are seeking to extend their reach across multiple regions of China, driving consolidation in the industry.
Dingdong Maicai was one of the top 20 highest-funded agrifood startups last year according to AgFunder data, banking $300 million in a General Atlantic-led round that valued it at around $2 billion. This came just after the company reported a 14% spike in user activity in January 2020 as Covid-19 took hold in China.