Chinese fresh produce social commerce site Fresh Buddy secures $100m

Fresh Buddy
Boxes of fruits and vegetables sit at the Hunts Point Terminal Produce Market in the Bronx borough of New York, U.S., on Monday, Nov. 23, 2015. Photographer: John Taggart/Bloomberg

Fresh Buddy, a Chinese fresh produce social commerce platform, has raised $100 million in its Series B funding round led by Genesis Capital and backed by SIG China, DCM Ventures, and Vision Plus Capital, according to media reports.

The Beijing-based startup platform has been selling and delivering fresh vegetables and fruits since its inception early this year. But that business model, which has been followed by a number of e-commerce sites in China, is not enough for the company to stand out and rake in millions of investments from big-ticket investors.

So Fresh Buddy, a project incubated by Tencent-backed Miss Fresh, introduced a new twist to the process – it offers cash rewards to users who refer other people to use the app and make purchases.

An average referrer can get up to $145 a month while those who get more people to the site could get that same amount in a day, according to Fresh Buddy’s marketing spiel.

That model became a hit for both consumers and investors. According to market research firm iResearch, users of the Fresh Buddy app increased 70 per cent month-over-month to reach 30 million unique mobile installs in October.

In July of this year, Fresh Buddy raised $30 million in its Series A funding round backed by DCM Ventures, SIG China, and Welight Capital.

Fresh Buddy plans to utilise the fresh funding to strengthen its supply chain and logistics centre. The company said it sources directly from farms to cut costs.

This year saw a number of fresh produce-focused e-commerce sites raising funds as investors bet on a continuously growing market for fresh products. According to an iResearch report, the total transaction of China’s fresh produce e-commerce industry in 2017 alone reached about $21 billion, up 59.7 per cent year-on-year.

In January, Shenzhen-based fresh fruit chain retailer Pagoda raised $230 million in a Series B funding round backed by a number of investors, including Shenzhen Capital Group and Source Code Capital.

On-demand fresh food firm DingDing Fresh Food also received nearly $14 million in a Series a funding round led by Hidden Hill Capital, the venture capital arm of GLP.

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China: Tencent-backed MissFresh snags $450m funding