Olympic Champion Li Xiaopeng Joins Amino Acid Hair Care Brand Zhiguan in Closing Tens of Millions of RMB in Series B Funding | FreeS Fund Deal News

On May 30, Chinese amino acid hair and body care brand Zhi Guan announced the completion of a Series B financing round worth tens of millions of RMB. Legend Capital led the round, with FreeS Fund, an investor from the angel round, following on. This marks the fourth financing round Zhi Guan has completed in its three years since founding.

Zhi Guan was built by a team with Procter & Gamble backgrounds, launching amino acid hair care products in 2016. The following year, it introduced amino acid body wash and facial cleansing mousse. This round of funding will continue to support the brand's expansion into new categories.

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From the Investors

Li Feng, Founding Partner of FreeS Fund

Email: feng@freesvc.com

Congratulations to Zhi Guan on this new round of financing. FreeS Fund is delighted to have the opportunity to work alongside new investors who know China's consumer goods sector well, helping Zhi Guan enter its next phase.

Going back two or three years, during pre-investment discussions, we had our doubts. In the personal care and household products market — already dominated by giants operating close to monopolies — could a new brand really emerge by using the internet as a medium and e-commerce as a distribution channel?

Over the past two years, we've had the privilege of witnessing Zhi Guan's rapid growth. Zhi Guan is the kind of brand that pours its whole heart into product development. It took eight months from receiving investment to bringing products to market. One result of their careful, patient approach to product-making is that despite initially having very few SKUs, they achieved growth that was hard to imagine. The Zhi Guan team has been rigorously trained and tested. They've received long-term professional training from Procter & Gamble across marketing, branding, and R&D, and they're also well-adapted to new ways of building brands — using the internet for brand communication and e-commerce as a sales channel — which has enabled their explosive growth over the past year or so.

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On May 30, Chinese amino acid hair and body care brand Zhi Guan announced the completion of a Series B financing round worth tens of millions of RMB, led by Legend Capital, with existing shareholders Matrix Partners China and FreeS Fund following on.

Zhi Guan has completed four financing rounds in the three years since its founding, reflecting capital markets' recognition of new consumer brands with strong market performance. Previously, Zhi Guan received multiple rounds of investment from FreeS Fund, Babytree founder Wang Huainan, and Matrix Partners China.

▍Ex-P&G Team Digs Deep into FMCG

Zhi Guan was born in Guangzhou in 2015. The founding team all came from Procter & Gamble and had deep familiarity with the personal care industry. In 2016, Zhi Guan first launched amino acid shampoo — a rarity in the domestic market at the time.

"We found more and more Chinese consumers looking for higher-end, healthier, more personalized personal care products, but products on the market either couldn't meet consumer needs or were expensive imported goods," said founder Tang Liang.

Looking at the global market, Britain's Lush and America's Honest and 100% Pure have all won consumer favor with their pure, natural brand philosophy and products. In recent years, domestic demand for natural products has also been rising. Related data shows that 60% of users are interested in natural, additive-free personal care products containing herbal ingredients.

Beyond this, younger consumers also care about individuality, aesthetics, and scientific efficacy. But most domestic brands with a plant-based positioning remain stuck in combinations of ginseng, ginger juice, and fleece-flower root that "feel like products aimed at my mother's generation."

In 2016, Zhi Guan jointly developed breakthrough amino acid hair care products with Japan's Osaka Kashihara Research Institute, founded in 1916. Compared with off-the-shelf sulfate-formula products, its plant-derived ingredients accounted for over 60% of effective content, making it gentler and more skin-friendly. At the same time, the breakthrough amino acid formula better cleanses and cares for sensitive scalps, making hair stronger and healthier. Plant-based and more reassuring; technology-driven and more effective. Combined with fresh, minimalist packaging, it kept younger consumers buying again and again.

In 2016, Zhi Guan became China's top-selling amino acid shampoo brand upon launch. On 2017's Singles' Day, it set a record of selling 10,000 bottles in three minutes, ranking 8th in Tmall's hair care category and leaving many well-known hair care brands behind. It held the #1 position in China's amino acid shampoo market for two consecutive years.

In 2017, Zhi Guan launched amino acid body wash and facial cleansing mousse lines. "Our goal is to fill your entire bathroom with reassuring, effective, healthy personal care products," Tang Liang explained.

▍Li Xiaopeng and Wife Join as Partners

In March 2017, Olympic champion Li Xiaopeng and his wife joined the Zhi Guan team as partners and chief product officers. "I hope that Aoli, her younger brother, and more Chinese children can use healthier, gentler, more environmentally friendly products," Li Xiaopeng said.

In May 2018, after a year of careful development led by Li Xiaopeng and Li Anqi's professional team, Zhi Guan's amino acid children's care line officially launched. It continued Zhi Guan's "reassuring + effective" characteristics while being specially formulated for children's unique needs.

Discussing what prompted this product's development, Li Xiaopeng shared a true story that happened to his own child.

"When my son was a little over one year old, red rashes suddenly appeared all over his body. Anqi and I were frantic. After repeated investigation, we discovered a piece of clothing he had touched was the culprit," Li Xiaopeng recalled. "If clothing that only indirectly touches the skin could cause such serious consequences, then we should be even more careful about the products children use directly on their heads, faces, and bodies. I wanted to create a reassuring, effective, healthy product — for my own children and for more Chinese children."

▍High Value for Money Is King

Zhi Guan is positioned as a high-value-for-money consumption upgrade brand. It uses formulations that match or even surpass international premium brands, but at half their price.

"Zhi Guan's amino acid shampoo actually performs better in user experience than a certain well-known international premium brand's amino acid shampoo that we benchmark against, but our price is less than half of theirs," Tang Liang said. "This is inseparable from having multiple senior technical experts on the team who have immersed themselves in the hair and body care industry for decades. Additionally, e-commerce helps us avoid expensive traditional channel costs. The rise of new media helps us reach target consumers more efficiently. So we can pass on the savings from channel and marketing costs to consumers as the greatest benefit."