Source Code Capital Portfolio Company Baibu, a Textile B2B Platform, Announces $300 Million Series D Funding Round; Source Code Capital Was Sole Investor in Angel Round

源码资本·December 16, 2019·0·3

The largest single financing round in China's textile and fabric sector to date.

On December 16, 2019, Baibu, a leading Chinese B2B textile platform, announced the completion of a $300 million Series D round — the largest single financing round in China's textile and fabric sector to date — further cementing its position at the top of the industry. The round was led by DST Global, with co-investment from CICC Capital, and continued follow-on investment from Source Code Capital, Tiger Global Management, Yunqi Capital, Chengwei Capital, and Bull Capital. China Renaissance served as the exclusive financial advisor. Source Code Capital, a returning shareholder, was the sole investor in Baibu's angel and pre-Series A rounds, and has continued to increase its stake through the Series A, B, and C rounds.

Beneath the trillion-yuan textile and fabric market lie acute industry pain points: upstream grey-fabric mills suffer from low loom utilization rates and below-average operating rates, coupled with high raw material procurement costs for yarn. The midstream distribution layer contains numerous first-tier wholesalers who, within the apparel fabric value chain, handle fabric design, production coordination, and spot inventory — exposing them to significant inventory liquidation risk. Meanwhile, information opacity leaves downstream small and medium-sized garment manufacturers, who command the vast majority of market share, facing exorbitant finished-fabric procurement costs, inefficient purchasing processes, and poor buying experiences.

Founded in 2014, Baibu is currently a leading smart supply chain service platform for textile fabrics in China. The company operates two core business segments:

Connecting upstream grey-fabric mills with first-tier wholesalers to jointly build intelligent cloud factories for grey-fabric production.
Connecting first-tier wholesalers with downstream small and medium garment manufacturers to establish a high-quality finished-fabric trading platform for the industry.

While addressing industry pain points and improving efficiency across production and trading, Baibu has built a one-stop industrial-grade supply chain infrastructure platform for the textile fabric sector, encompassing warehouse upgrades, logistics management, and innovative financial products.

Baibu's strategy for entering the textile fabric industry has achieved both vertical depth and horizontal breadth:

Vertical depth: Baibu focuses on the textile fabric value chain, tackling real pain points at each link to deliver value. Through AIoT and SaaS services, it enables intelligent management and effective allocation of upstream production capacity. It also enhances matching efficiency and trading experience through comprehensive industry databases and image-search technology.
Horizontal infrastructure: Through technological innovation, Baibu builds an industrial-grade infrastructure platform, achieving efficient and integrated warehousing and distribution networks with highly closed-loop one-stop fulfillment capabilities. It also brings in third-party financial institutions to continuously innovate supply chain financial products that empower the industry and improve cash utilization across all segments.

Through this vertical and horizontal approach, Baibu has systematically covered 10% of loom capacity in upstream production, while comprehensively covering 70% of suppliers and product categories in downstream trading — further solidifying its absolute leading position in the textile fabric industry. Baibu will continue to co-innovate with upstream and downstream industry players to jointly build a new ecosystem covering the complete textile fabric value chain.

Zhao Zhenhong, Baibu's founder and CEO, stated: "Advancing the upgrade of the textile industry is our company's mission. Baibu will continue to embrace an industrial mindset, guided by the principle of 'delivering value to the industry and transforming its inefficiencies,' and put this into practice. Through technology-driven empowerment of upstream and downstream partners, we will achieve collaborative wins, jointly establish new standards for industrial services, and lead the global textile fabric industry into a new economic normal."

Xingchen Zhang, a board member representing Source Code Capital, said: "We were the exclusive investor in Baibu's angel and pre-Series A rounds, and have continued to increase our investment in every subsequent round, including this one. Following this financing, Baibu will participate even more deeply across all aspects of intelligent manufacturing and intelligent circulation in the textile industry. We have long-term conviction in the tremendous social and commercial value that Baibu and its management team will create in the textile industry internet."

Following this round, Baibu will continue to invest in supplier partnerships, product R&D, warehousing systems, and customer service, advancing the digitalization and intelligentization of the textile industry to build a better, more efficient, more transparent, and more intelligent flexible supply chain service system for textile fabrics.