Shenzhen-based agricultural products distributor Wangjiahuan announced on Monday that it has closed 600 million yuan ($87 million) in a Series B round of financing led by Chinese on-demand service giant Meituan-Dianping.
Its existing shareholder Hidden Hill Capital, the private equity platform of GLP China, participated in the investment.
Meituan-Dianping has an important business layout in the catering supply chain field, creating “a huge space for collaboration” between the two companies in areas like agricultural product procurement, delivery, as well as staff and vehicle management, said Gao Jun, founder and chairman of Wangjiahuan, in a statement posted on the company’s official WeChat account.
Wangjiahuan, formally known as Guangdong Wangjiahuan Agricultural Products Group, was established in 1995 to provide agricultural products farming, processing & distribution, agricultural products logistics park development and construction, catering management, as well as other related services.
The company claimed to have a combined 200,000 mu (133.33 million square metres) of agricultural production bases, serving more than 200 food brands and nearly 20,000 large-scale institutional clients nationwide, according to the statement. The firm now has over 130 subsidiaries, joint ventures and branch offices across China.
Group-buying meal supply chain is one the few segments that can realize integrated benefits of a large business scale, rapid growth and profitability in the food supply chain space, said Zhou Yu, senior investment director at Meituan-Dianping. Zhou said that “the Matthew effect” of accumulated advantage will soon emerge in the space amid the increasingly tightened food safety requirements in China.
Beijing-based Meituan-Dianping, a group buying website that offers catering, on-demand delivery, hotel and travel booking, and other entertainment and lifestyle services in China, is ramping up efforts in the domestic catering market which reached a combined income of 4.67 trillion yuan ($673.66 billion) in 2019, up 9.4 per cent compared to 2018, according to China Hospitality Association.
The aggregate income in the group-buying meal supply chain field, in particular, stood at about 1.2 trillion yuan ($173.10 billion) in 2019, and might further grow amid a rebound in restaurant consumption once the deadly coronavirus is contained.
Proceeds of the new round will be used to lift services through the construction of more efficient platforms for urban shared product distribution, county-level agricultural development, shared product procurement services, as well as the ensurance of agro-product quality & safety.
Wangjiahuan announced the completion of a Series A round at nearly 400 million yuan ($58 million) in August 2018. The previous round was backed by Singapore-based logistics solution provider GLP.