B2B Building Materials Platform Zhangshang Fucai Raises $8 Million Series A, Source Code Capital Continues to Increase Stake

源码资本·November 7, 2018·0·0

A B2B self-operated e-commerce platform focused on the building materials accessories industry

Source Code Capital portfolio company Zhangshang Fucai, a self-operated B2B platform for construction finishing materials, has raised $8 million in Series A funding led by ZhenFund, with continued follow-on investment from existing shareholders Source Code Capital and Buhuo Ventures. Previously, Zhangshang Fucai had raised angel and Pre-A rounds totaling tens of millions of RMB from Source Code Capital and Buhuo Ventures.

Zhangshang Fucai is a self-operated B2B e-commerce platform focused on the construction finishing materials industry, modeled after HD Supply (NASDAQ: HDS), a United States-based company with an $8 billion market cap. The finishing materials market currently operates primarily through offline distribution channels. Zhangshang Fucai targets this market with a self-operated model that integrates upstream brand manufacturers and factories, builds its own warehousing and logistics infrastructure, and provides one-stop product delivery services to B-side customers including construction foremen and renovation companies.

Wanrong Zhao of Source Code Capital said: "As an angel-round investor in Zhangshang Fucai, Source Code Capital is optimistic about the efficiency gains the company brings to transforming and replacing traditional distribution channels. In this massive industry without dominant upstream brands, we believe the Zhangshang Fucai team can continue to integrate and reshape both distribution channels and upstream manufacturers."

The founding team brings serial entrepreneurship experience, strong internet DNA, and deep industry expertise: CEO Chengkun Xue is co-founder of PPzuche (China's largest peer-to-peer car-sharing platform, which completed its Series C in mid-2015), with extensive experience in corporate strategy, new business incubation, and management; Supply chain lead Lanjiang Sun, formerly a product lead at Tencent Community Search and Weibo, and VP of Product at PPzuche; Foreman operations lead Tao Wang, former head of Tencent's big data product team and user operations director at PPzuche; Supply chain director Xin Wang, former general manager of Easyhome's building materials supermarket, with nearly 20 years of comprehensive management experience in the building materials industry. The team aims to continuously identify inefficiencies in the industry chain, improve operational efficiency, and provide customers with a more convenient, more comprehensive, and more cost-effective solution.

Zhangshang Fucai CEO Chengkun Xue

Since its launch in September 2017, Zhangshang Fucai has moved with unstoppable momentum, overtaking multiple established players in Beijing's finishing materials market to become the city's number one finishing materials e-commerce platform within a year. Strategically, the company has focused on two fronts: first, deepening customer and market insights while improving supply chain efficiency to drive business growth; second, investing core resources in IT system development and the formulation and implementation of standardization — building an intelligent operations system for procurement, logistics, and sales, while continuously exploring ways to enhance the replicability and sustainability of its current model, laying the groundwork for future expansion.

This round of funding will be used to improve efficiency across supply chain, logistics, sales, and operations, as well as to explore new business models. The company will continue to deepen its presence in the Beijing market, identify the optimal replicable model, and expand into additional cities.

ZhenFund investment manager Lulu Sun, who participated in this round, commented: "The finishing materials industry has seen structural opportunities emerge in recent years, with a high ceiling and significant expansion potential. Mr. Xue brings rich entrepreneurial experience, and we believe he can lead the team to execute a dimension-reducing competitive strategy that structurally improves efficiency and reduces costs, bringing transformation to the finishing materials industry."

Buhuo Ventures partner Jiayu Yi said: "Over the past year, Zhangshang Fucai has made strong progress in IT development and data-driven supply chain upgrades. The finishing materials industry needs demand-side digital transformation. We are optimistic about Mr. Xue leading the team to continue deepening its industry presence, executing well on regional pilots, and replicating nationwide through efficiency advantages."

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