58.com’s used goods trading platform Zhuan Zhuan rakes in $390m

Zhuan Zhuan, an online used goods trading platform affiliated with Chinese online classifieds marketplace 58.com, has secured $390 million in new funding.

In a statement on Friday, Zhuan Zhuan said the fresh funding came from the Chinese government-backed Greater Bay Area Homeland Development Fund, as well as Qingyue Fund, which is backed by Rongkong Group, a state-owned investment firm located in eastern China’s port city of Qingdao.

The transactions were made before the Chinese New Year in mid-February, said the firm. As part of the deal, Zhuan Zhuan will relocate its national headquarters from Beijing to Qingdao, where it plans to build the nation’s biggest intelligent quality inspection centre for second-hand consumer electronics.

This is the first funding round that Zhuan Zhuan has closed since its acquisition of Shenzhen Wanshifu Technology, an operator of used phones trading app Zhaoliangji, in May 2020. Zhuan Zhuan paid for the transaction through a combination of 360 million yuan in cash and newly issued shares of Zhuan Spirit Holdings Limited, its ultimate holding firm. It said that it had reached a valuation of up to $1.8 billion after the deal.

The latest capital infusion will help fund Zhuan Zhuan’s fight against archrival Xianyu, which is backed by Alibaba, in the local second-hand e-commerce market. The overall transaction value of the country’s second-hand products reached nearly 1.3 trillion yuan ($198.1 billion) in 2020, up about 34.8% from 964.6 billion yuan ($147.0 billion) in 2019, according to consultancy MobData.

Zhuan Zhuan, backed by Chinese social networking and gaming firm Tencent, currently ranks second in the market with a 33.1% market share, while Xianyu holds a 72.9% market share, a January market report from market researcher Shenwan Hongyuan shows. Collectively, the two players dominate 90.9% of the market, weighing on the growth margin of upstarts such as JD.com-backed Wanwu Xinsheng Group, previously known as Aihuishou.

Zhuan Zhuan said that it plans to focus on transactions involving used computer, communications, and consumer electronics (3C) products and direct additional resources to develop consumer-to-business (C2B) used phone trading services.

The firm claimed that its gross merchandise value (GMV) increased 111% in 2020. Its total annual revenue also grew 229% last year compared to 2019.

Prior to the new financing, Zhuan Zhuan had received two investments. The firm garnered $300 million in a Series B round from investors including 58.com and Tencent in September 2019. In April 2017, it closed $200 million in a Series A round from Tencent, which granted the startup access to the tech giant’s social media and e-commerce resources.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.