Tencent Holdings -backed MissFresh closed US$495 million of financing from backers led by China International Capital Corp, underscoring strong investor interest in online commerce and groceries during the Covid-19 pandemic. The Beijing-based online grocer also attracted Goldman Sachs’ asset management arm, Tiger Global Management, the Industrial and Commercial Bank of China and Abu Dhabi Capital, as one of several online services that thrived during nationwide lockdowns. The financing round was on track to value the start-up at about US$3 billion before investment, people familiar with the deal have said. Beijing MissFresh Ecommerce Co – one of dozens of start-ups Tencent backed during China’s internet boom – is competing in a cash-burning sector with deeper-pocketed companies including Alibaba Group Holding and JD.com . Alibaba is the parent company of the South China Morning Post . Coronavirus outbreak drives demand for China’s online grocers as tens of millions of consumers hunker down at home Consumers sheltering at home during the pandemic have reinvigorated a once-difficult groceries arena, and Missfresh now needs ammunition to attack a Chinese online fresh foods sector that could reach US$178 billion by 2025. The start-up, founded in 2014, has more than 1,500 mini-warehouses that promise deliveries as fast as within an hour, it said in a statement last year. Missfresh had nearly 25 million monthly active users as of May last year. It handled 10 billion yuan (US$1.5 billion) of transactions in 2018 and had generated positive cash flow by the end of that year, the company said at the time. China Renaissance served as the exclusive financial adviser on its latest deal. The funding will help tide Missfresh over in an uncertain venture capital environment. VC funding plummeted at the start of 2020, with investors stranded at home and increasingly risk-averse. How China’s delivery services platforms are evolving, from smart lockers to ‘semi-finished’ meals But online commerce is one sector that continues to draw investor attention. Investors including Tencent and private equity giant Primavera Capital are pitching in on a separate funding round that values rival Xingsheng Youxuan at US$3 billion, people familiar with the matter have said. Excluding the latest effort, MissFresh has raised nearly US$900 million since its inception via eight funding rounds from investors including Jeneration Group and Genesis Capital, the company has said.