Source Code Capital portfolio company Yijiupi raises $200 million in Series D funding, co-led by Meituan and Tencent, with existing investor Source Code Capital continuing to increase its stake

源码资本·September 21, 2018·0·0

On September 20, Source Code Capital portfolio company Yijiupi announced the completion of its Series D funding round at a valuation of $1.1 billion, officially joining China's internet "unicorn club." Yijiupi had completed its Series C round in October 2016; nearly two years later, it launched a new funding round in June of this year and quickly signed the Series D capital increase agreement.

Yijiupi Official Website

On September 20, Source Code Capital portfolio company Yijiupi announced the completion of its Series D round, valued at $1.1 billion, officially joining China's internet "unicorn club." In October 2016, Yijiupi closed its Series C round. Nearly two years later, it launched a new funding round in June of this year and quickly signed the Series D investment agreement.

The Series D round is reported to total $200 million, led jointly by Meituan and Tencent, with follow-on investment from China Everbright Limited and other investors. Existing shareholder Source Code Capital continued to increase its stake. LightSource Capital once again served as the exclusive financial advisor for the company's fundraising.

Source Code Capital led Yijiupi's Series B round, marking one of its significant investments in the industrial internet space. Through its "Ma Hui" platform, Source Code Capital actively facilitated multi-dimensional cooperation between Yijiupi and Meituan, driving category deepening, category expansion, and strong GMV growth.

Founded in September 2014, Yijiupi's development has unfolded in four stages: in 2014, it entered B2B through wholesale of alcoholic beverages; from 2015 to 2016, it rapidly expanded across regions nationwide; from 2016 to 2017, it successfully expanded into non-alcohol categories; and from 2017 to 2018, it extended services upstream and downstream across the industry chain — warehouse and logistics sharing, supply chain finance, and terminal retail chains.

After four years of growth, as of the end of June 2018, Yijiupi had covered 83 cities across 26 provinces, with over 3,000 employees. The platform's current monthly transaction volume (GMV) has exceeded 1 billion yuan, with more than 40,000 SKUs available. Full-year GMV for 2018 is projected to reach 20 billion yuan, with real-warehouse sales leading the industry by a wide margin.

Yijiupi has built infrastructure and a massive user base through its self-operated presence in nearly 100 cities. Among the top three categories by terminal sales volume, Yijiupi has consistently dominated the alcoholic beverage category, while its real-warehouse throughput for drinks has risen to first place nationally. In May 2018, Yijiupi successfully acquired "Huijinhua," a snack food B2B platform, launching its strategic push into the snack food category — another important step toward advancing its platform strategy. Just three months after the transaction, Yijiupi's food category transaction volume had already grown several-fold over. Over the next two years, Yijiupi will further expand its national regional footprint, rapidly scaling transaction volume through a combination of self-operated and dealer-commissioned models.

For Meituan and Tencent, the lead investors in this round, FMCG B2B represents an undeniably important track. On one hand, FMCG B2B offers substantial room for growth. Even benchmarking against the United States, where modern trade channels are the most developed and dominant, FMCG B2B has produced several companies worth tens of billions of dollars. By comparison, China remains dominated by traditional channels with fragmented retail terminals — a market of 6.8 million small shops that will inevitably give rise to even larger B2B supply chain enterprises.

Moreover, a strong founding team has been key to the company's successive funding rounds. Yijiupi's core founder, Wang Chaocheng, is a serial entrepreneur with clear strategic thinking, a gift for learning and adaptability, and extraordinary entrepreneurial passion. In an intensely competitive market, Yijiupi stands as the absolute leader in China's FMCG B2B industry across market scale, growth velocity, and financial health.

The most compelling aspect behind Meituan and Tencent joining forces as lead investors is the strategic business collaboration between the investors and the portfolio company. Meituan's vast base of local consumers and restaurant terminals, Tencent's mini programs and payments, and Yijiupi's supply chain and retail terminals — the synergy among the three enables a new digital reconstruction of "people, goods, and place" in the FMCG industry, forming a matched combination of "Yijiupi (supply chain/terminals) + Tencent (WeChat Pay/mini programs) + Meituan (in-store/delivery)." This creates multi-win outcomes internally and combined competitive advantages externally.

Going forward, Yijiupi can leverage WeChat's mini programs, WeChat Pay, and other tools to jointly serve various retail terminals nationwide — providing each terminal with more convenient and lower-cost payment tools through WeChat Pay, and building intelligent online stores for each terminal through store mini programs to facilitate online-offline integration. Additionally, traffic will be driven to terminals through Meituan's online stores and WeChat's "Nearby Mini Programs."

"With the powerful strategic support of Meituan's local life traffic entry point, Meituan's restaurant merchant resources, WeChat Pay, Tencent Cloud, and other capabilities, Yijiupi's development in related business areas will be very rapid," industry observers commented.

On the Meituan side, it will jointly integrate and share FMCG supply chain capabilities with Yijiupi. Facing 7 million retail terminals and 8.5 million restaurant terminals nationwide, the two parties will jointly build powerful integrated supply chain capabilities in alcohol, food, fresh produce, and other categories, and fully empower the various retail terminals served by Yijiupi through access to Meituan's super traffic in local life.

Yijiupi is currently committed to becoming a platform enterprise for the FMCG industry. First, it offers financing, warehousing and logistics, and merchant onboarding services to traditional distributors, integrating with traditional agency to improve social efficiency. Second, it builds "factory-to-terminal" product brands, achieving extreme supply chain efficiency through digitization. Third, it empowers and conducts new retail transformation for the offline stores it serves through multiple approaches.

"The company has clear goals, and both its business model and profit model are mature. The proceeds from this round will be used for four areas: national regional expansion, platform category enrichment, strategic product R&D, and nationwide warehouse upgrades. The new capital injection will advance Yijiupi's 'nationalization, full category' platform strategy and further strengthen Yijiupi's position as 'new retail infrastructure,'" Yijiupi COO Chen Shengqiang told reporters.

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