Tencent-backed grocery startup Missfresh nears $500m fundraising deal

Changhua Road, Putuo, Shanghai, China. Photo: Max van den Oetelaar/unsplash

Tencent Holdings Ltd.-backed Missfresh is on the verge of closing $500 million of new financing to quicken expansion after the Covid-19 outbreak bolstered demand for fresh groceries, people familiar with the matter said.

Beijing Missfresh Ecommerce Co., which counts Goldman Sachs Group Inc. and Tiger Global Management among its backers, recently wrapped up the second tranche of a funding round that will raise a total of about $300 million and another 1 billion to 1.5 billion yuan ($211 million) of Chinese currency funding, the people said, requesting not to be named because the matter is private. A third and final tranche will be completed soon but the financing has so far valued the grocery delivery startup at about $3 billion before investment, the people said.

A company representative declined to comment.

Missfresh — one of a clutch of startups Tencent backed during China’s internet boom — is competing in a cash-burning sector with deeper-pocketed corporations including Alibaba Group Holding Ltd. Consumers sheltering at home during the Covid-19 pandemic have reinvigorated the once-difficult online groceries arena, and Missfresh now needs ammunition to attack a Chinese online fresh foods sector that could reach $178 billion by 2025.

The company, founded in 2014, has more than 1,500 mini-warehouses that promise deliveries as fast as within an hour, it said in a statement in July. Missfresh had nearly 25 million monthly active users as of May last year. It handled 10 billion yuan ($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.

The funding will help tide Missfresh over during tough times in the venture capital market. VC funding plummeted at the start of 2020 with investors stranded at home and increasingly risk-averse. Excluding the latest effort, the Beijing-based startup has raised nearly $900 million via eight funding rounds from investors including Jeneration Group and Genesis Capital, the company has said.

Bloomberg

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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.