Tencent-backed fresh produce retailer raises $100m

On the back of Pinduoduo's successful IPO, another Tencent-backed fresh produce site called Meiri Yitao has raised significant Series B funding.

Fresh produce social commerce platform Meiri Yitao has raised $100 million in Series B funding led by Genesis Capital.

Existing shareholder Susquehanna International Group (SIG) also joined the round together with venture capital firms DCM and Vision Capital. China Renaissance is the financial advisor for the deal.

Proceeds will be used to expand its supply chain and to build logistics centre to speed up delivery.

Meiri Yitao completed its Series A funding in July, when it raised $30 million from DCM, SIG and Welight Capital.

Meiri Yitao is a sub-brand of fresh produce delivery app MissFresh E-Commerce. It launched in 2014 and has raised $940 million in five rounds of funding, the most recent in September this year. Tencent has supported MissFresh’s funding since Series A - other notable investors include Tiger Global Management and Lenovo. 

MissFresh started the Meiri Yitao brand - it means Freshbuddy - in April this year. Unlike MissFresh, which focuses on fresh food and door-to-door delivery within an hour, Meiri Yitao focuses on group purchase features and depends on social media sharing for more traffic volume. It allows users to share a link to their social media account (particularly on Tencent-owned WeChat) and discounts increase if more people join the same purchase.

Meiri Yitao's business model is exactly the same as that of Pinduoduo – both offer discounts for group purchases. Although it has its own app, the key to discounts is to attract more people by sharing the product link, which involves social media. According to the website of its parent MissFresh, it currently has 2 million users and claims to have made over $14 million in sales on its platform.

But that also gives Meiri Yitao the same long-term dependency on Tencent. Users tend to share food purchase links with family, friends or neighbours, and it would be almost impossible to use Meiri Yitao without WeChat. More to the point, users check WeChat more often than they check other apps, and can complete their purchases using the app too.

From Tencent’s perspective, it seems that the internet giant has been trying to dominate China's e-commerce sector by helping e-commerce apps, each with a different focus, to grow. Tencent’s partner JD.com is known for electronic products while Pinduoduo focuses on daily essentials. And now, with the completion of a new round of funding, Meiri Yitao will provide Tencent users with fresh produce on a daily basis. 

Last month, Beijing emphasized the importance of e-commerce to the economy as it fuels the growth in logistics, tech and big data. Everything points to continued growth for Meiri Yitao over the next few years. 

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