Fresh food e-tailer Fruitday lands 100m yuan in new funding
Latest round to be used to upgrade supply chain and logistics facilities to store, ship, and track its goods
Fruitday, one of China’s leading online fresh produce sellers, has completed a 100 million yuan D+ round of financing, in spite of a wave of failures by once-promising e-commerce start-ups in the sector.
The company — located in Zhangjiang Hi-tech Park in Shanghai and earlier back JD.com — said in a statement its investor this time round was its landlord, the state-owned Shanghai Zhangjiang Hi-tech Park Development Company.
It said the funds would be used to upgrade its supply chain and logistics facilities to store, ship, and track its goods.
The funding round follows a US$100 million series D round earlier this year, led by JD.com, Susquehanna International Group SIG, and ClearVue Partners.
Founded in 2009, Fruitday has expanded fast after building a nationwide cold storage and logistics network which can deliver fresh produce to customers within two hours of being ordered online in major cities such as Beijing, Shenzhen and Shanghai.
The company previously completed series A and B rounds in 2013 and 2014 from SIG and ClearVue, and a C round in 2015 from JD.com and others, in total raising more than US$200 million.
The strong series of investments has come despite fierce competition to grab a larger share of China’s fresh food industry, a sector estimated to be worth 2.5 trillion yuan last year, according to media reports.
The mainland’s online fresh-fruit market, particularly, has expanded at breakneck speed from just 50 million yuan in 2009 to a projected 100 billion by 2020.
According to data from market research company iiMedia Research, just one per cent of China’s total of 4,000 online fresh fruit retailers are profitable, and 95 per cent are making a loss.
Since the start of the year, there has been a rash of fresh-food online start-up failures, due to the cutthroat competition.
In March, the hyper-local shopping app connected to large supermarkets Dmall, which promises one-hour delivery to customers, was reportedly to have laid off half of its workforce, a year after it secured US$100 million in angel funding.
Beequick, a food and drink delivery startup, which landed a US$20 million series B round of funding last year, had to lay off 400 people, or 30 per cent of its workforce in April because of financial difficulty, according to China Business Journal.
And at the start of this month, Guoshibang, another online fresh produce seller set up in 2014 in Shenzhen, revealed it was shutting down because of soaring logistics costs involved in transporting chilled goods.