It’s the fourth round of funding that Nice Tuan — also known as Shi Hui Tuan — has netted since the start of 2020. In January it banked $88.3 million from investors including Alibaba and ZhenFund, following that up in June with an $81.4 million “Series C1” round led by GGV Capital. A month later, its CDH Investments-led “Series C2” raise brought in another $80 million.
Beijing-based Nice Tuan connects farmers and other food producers to retailers, foodservice businesses, and end customers. It allows buyers to form groups via its WeChat mini-program, enabling them to collectively buy produce in bulk for more competitive prices.
It’s just one of a number of similar community e-commerce platforms that have sprung up in China in recent years, as consumer appetites for fresh and traceable farm-grown produce hit new heights.
In September, Bunny Maicai secured “tens of millions of dollars” in a Series A round led by an affiliate of real estate giant Country Garden, with Joy Capital and ZWC Partners also taking part. The startup combines the online group-buying concept with a chain of physical stores to give customers an online-to-offline experience.
Another group-buying app, Tongcheng Life, raised $200 million in Series C funding back in June. The round was co-led by livestreaming platform Joyy, which has recently hit headlines after a report on the company by investment research firm Muddy Waters accused it of “multi-billion dollar fraud.”
According to the most recent edition of AgFunder’s China AgriFood Startup Investing Report, Tongcheng Life raised $100 million for its August 2019 Series B round led by Lenovo-affiliated Legend Capital; while Familyone, also known as Lilinyi, got $30 million from Sequoia Capital, Capital Today, Gaorong VC, Source Code Capital, and retailer Suning.
More broadly, Chinese e-grocers have been attracting big-dollar funding from domestic and overseas investors alike.
MissFresh scored $495 million in July from CICC, Goldman Sachs, Tencent, Tiger Global, and others. It operates a network of close to 1,500 small-scale distribution centers near residential areas across China, bringing an element of localization to its grocery service and allowing it to cut both delivery times and cold-chain costs when compared to providers that rely on fewer larger-scale warehouses.
Beijing-based MissFresh was China’s highest-funded agrifoodtech startup last year, according to AgFunder research, securing $700 million in debt financing from local government. Also netting large funding amounts in 2019 were fellow Tencent investees Yipin Fresh — a ‘new retail’ supermarket that received $298 million in a round led by the tech giant — and tech-enabled convenience store chain Furong Xingsheng, which raised a total of $246 million across two rounds.
In a statement on the WeChat page of Cygnus Equity — which also acted as sole financial advisor for the transaction — Nice Tuan said it will use the “Series C3” funds to help more small and medium-sized businesses to generate more income from their produce and other offerings, and expand sales channels for local brands and agricultural products.
“The community group-buying business model continues to iterate and evolve, and the entry of tech giants is bringing unprecedented competition [to this segment],” said Cygnus Equity managing director Jin Tao.
“We firmly believe that in such a rapidly changing market, Nice Tuan will be the ultimate winner thanks to its management team’s strategic vision, organizational abilities, strong execution, and determination.”