Source Code Capital Portfolio Company Community Group-Buying Platform "Linlinyi" Raises $30 Million in Series A Funding, Existing Investor Source Code Capital Continues to Increase Stake

源码资本·January 2, 2019·0·0

Source Code Capital portfolio company, community group-buying startup "Linlinyi," announced the completion of a $30 million Series A funding round. The round was led by Capital Today, with strategic investment from the Suning Ecosystem Fund. Existing shareholders Source Code Capital, Gaorong Ventures, and HSG continued to participate. Mumian Capital served as financial advisor.

Source Code Capital portfolio company Linlinyi, a community group-buying startup, announced it has raised $30 million in Series A funding. The round was led by Capital Today, with strategic investment from Suning's ecosystem fund, and follow-on participation from existing shareholders Source Code Capital, Gaorong Ventures, and HSG. Mumian Capital served as financial advisor.

Following this round, Linlinyi will focus on building out its supply chain infrastructure, upgrading its community leader operations system, and investing in backend operational IT systems, while laying groundwork for further national expansion.

As the lead investor in the Series A round and a Linlinyi board member, Yiwen Hao of Source Code Capital said: "In the fiercely competitive, rapidly evolving community group-buying sector, it's rare to find a team that can stay focused on building internal capabilities, assembling professional talent, and pursuing quality growth. Linlinyi's performance over the past two quarters made us very happy to double down."

Founded in March 2018 by Zhilong Xiao, Linlinyi's origins trace back to 2015 when Xiao launched Fresh Fruit No. 1, a fruit retail brand that gave him deep experience in supply chain and community operations — experience that would prove foundational for community group-buying. Since August of this year, Linlinyi has completed three funding rounds within six months, bringing its total raised to nearly $100 million.

Since launch, Linlinyi has established three regional operating centers in its home base of East China: a Jiangsu center in Suzhou, a Huaihai center in Xuzhou, and a Zhejiang center in Hangzhou. From these hubs, it has expanded to nearly 20 cities, covering thousands of residential communities. Monthly sales have grown more than 50% month-over-month, with current monthly revenue approaching RMB 100 million. Founder Zhilong Xiao said Linlinyi will continue city expansion and user penetration, with plans to launch a "100 cities" national strategy in 2019.

Zhilong Xiao, Founder & CEO of Linlinyi

Xiao believes community group-buying represents the embryonic form of next-generation e-commerce.

Social e-commerce traffic has a socialized character. Unlike traditional e-commerce, community group-buying operates as geographically-bound micro-clusters of traffic. The traffic is distributed and local, tied to residential communities, with low customer acquisition costs. Relying on content experiences and word-of-mouth referrals, conversion and retention rates are significantly higher.
The second feature is socialized fulfillment. By using pickup points distributed across residential communities, community group-buying not only improves fulfillment efficiency and minimizes logistics costs, but also creates face-to-face interactions with users during pickup. The communication and trust barriers between merchants and consumers that plague traditional e-commerce become negligible in this social commerce model.
The third feature is the shift from shelf-based to recommendation-based e-commerce. In shelf-based or traditional e-commerce, products are displayed for consumers to browse and select, making them highly dependent on product brands while channels remain weak. Community group-buying can deeply explain product advantages and quality, creating guided, recommendation-driven purchases. Here the channel becomes more powerful, and recommendation-based commerce commands stronger pricing power.
The fourth feature is the blurring boundary between physical and virtual goods. Traditional e-commerce platforms like Taobao and Tmall primarily sell physical goods, while Meituan and Dianping focus on local services; community group-buying breaks down this divide, selling both tangible products like fresh groceries, household items, and snacks, as well as services like health checkups, parenting education, and local travel experiences.
The fifth feature is the integration of online and offline. Competition in next-generation e-commerce no longer stems from online versus offline models, but returns to the essence of retail: whoever can serve consumers more efficiently and with higher quality will win more loyal customers.

Xiao believes these five characteristics validate the viability of the community group-buying model and its larger future potential. "It's a 42-kilometer marathon, and community group-buying companies have probably only run one or two kilometers."

As for Linlinyi's competitive advantages, Xiao points to the team's supply chain experience from its fruit retail origins. The company is building a centralized procurement and distribution model from source to city, emphasizing locking in quality goods at the origin and using bulk purchasing to further reduce procurement costs. At the same time, Linlinyi hopes to use systematic management to create clear contours of consumption patterns across city clusters, organizing community demand and cost structures into a systematic product model for community group-buying.

Leader operations are equally critical. From its founding, Linlinyi launched a "Leader Business School" to strengthen leader activity and loyalty through standardized management and tiered incentives. After signing contracts, leaders receive not only group-launch training but also three sales or skills training sessions per week. For top, mid-tier, and junior leaders, Linlinyi provides differentiated coaching. As Xiao puts it, "If you want to build a tall building, you need leaders as the supporting pillars."

Linlinyi continues to recruit specialized talent. Xiao noted that current team members include numerous core executives from major platforms including RT-Mart, Anjuke, Freshippo, and Meituan.

In November, Kunhua Liu, former China logistics general manager at RT-Mart, joined as co-founder to lead supply chain development.

Additionally, former Anjuke business center general manager Xiaochun Ji serves as Linlinyi's operations system general manager, and former SF Preferred CIO Zhigang Yin joined to lead platform technology development. Xiao believes this continuous talent infusion will help Linlinyi fill operational gaps. For instance, RT-Mart's warehouse and supply chain expertise can be adapted to Linlinyi, while real estate agent management systems can be borrowed to manage community leaders.