BRIEF: CHINESE TECH GIANT PUMPS $85M INTO FARM PRODUCE PLATFORM
Wangjiahuan, a Chinese B2B portal for agricultural produce, has raised 600 million RMB ($85 million) in a funding round led by ‘super app’ Meituan Dianping. A Meituan spokesperson confirmed its investment in Wangjiahuan to AFN.
Based in Shenzhen, Wangjiahuan is one of several farm-to-business (F2B) ecommerce platforms competing in the Chinese market. Its rivals include Meicai – which has raised $793 million in total funding since launching in 2014 and is said to be valued at around $7 billion – and Songxiaocai.
Wangjiahuan was founded as a traditional food supply business back in 1995, but has recently adopted a more tech-driven model – including features such as group buying and selling – to keep up with its younger competitors.
It buys produce directly from farmers, and focuses on selling it to hotels, restaurants, and other hospitality-related customers – as well as distributing to canteens in hospitals, schools, and factories.
This appears to dovetail neatly with Meituan’s wider offerings. The ‘super app’ – which raised around $4.2 billion in its Hong Kong IPO in September 2018 – provides a range of services including doorstep meal delivery, groceries delivery, and restaurant reservations and recommendations.
More recently it has begun to provide marketing and similar services to the merchant partners – such as restaurants – that it hosts on its platform. Having an agricultural supply-chain play such as Wangjiahuan in its portfolio could offer several synergies.
The Meituan spokesperson told AFN that Wangjiahuan is an attractive prospect because the “food supply chain is one of the few sectors with the potential for scale and growth, as well as profits”.
The company “has a huge first-mover advantage in bidding, supply chain, and funding”, they added.