Chinese business-to-business (B2B) online liquor retailer Yijiupi has acquired consumer goods distributing platform Zskuaixiao as the company seeks to grasp a larger stake in the fast-moving consumer goods (FMCG) market.
Along with the deal, Yijiupi also announced the completion of a Series D4 round from GLP, DragonBall Capital, and Source Code Capital. Financial terms of the round were not disclosed.
Yijiupi, whose investors include China’s Tencent and New York-based private equity major Warburg Pincus, bought out 100 per cent equity interest in Zskuaixiao, a Guangdong-based B2B consumer goods distributor that serves about 100,000 brick-and-mortar stores in southern China, according to a statement on Tuesday.
Southern China is “a region of strategic importance” for players in the FMCG market, said Wang Chaocheng, founder and chief executive officer of Yijiupi. He said that the acquisition will help the company expand its offerings beyond liquor products, as well as deliver meticulous operations and improved services across the whole nation.
Established in August 2016, Zskuaixiao has developed into one of the largest B2B consumer goods companies in southern China, with operations in 30 counties and 13 cities across Guangdong and Fujian province. It primarily serves mom-and-pop shops in second to fourth-tier cities.
Zskuaixiao raised 205 million yuan ($29 million) in a Series B round from Chinese investment firm Hina Group, Singapore-based logistics solutions provider GLP, DragonBall Capital, the venture capital arm of Chinese on-demand services platform Meituan-Dianping, and Beijing-based Source Code Capital, which has roughly $2.22 billion in total assets under management (AUM).
Chinese boutique investment bank Lighthouse Capital served as the exclusive financial advisor of the acquisition.
Founded in 2014 and started as a liquor retailing business, Yijiupi offered products and services to 800,000 stores in more than 500 counties and 138 cities in China in 2019. It recorded 20 billion yuan ($2.87 billion) in gross merchandise volume (GMV) in the year, according to the statement.
The Beijing-based company has grown into a unicorn in the Chinese FMCG industry after it closed at least seven investments from a cluster of blue-chip investors.
Among some of the largest funding rounds, Yijiupi raised $80 million in a strategic investment from Tencent in August 2019, less than six months after it received $100 million in a Series D+ round from Warburg Pincus.
The company also garnered $200 million in a Series D round led by Tencent and Meituan-Dianping in September 2018. It raised $100 million in a Series C round led by China’s Greenwoods Asset Management in October 2016.
