Chengdu-based logistics solution provider Xianshenghuo has closed its Series A round, bagging RMB 600 million (USD 92.5 million) from Longfor Capital, CICC Capital, and Far East Horizon, the company disclosed on its official WeChat channel on Tuesday.
Established in 2016 by Chinese agricultural giant New Hope, Xianshenghuo transports chilled and frozen food products from farms and factories to fresh food retailers and food processing firms. The company hasn’t revealed much about its clients, but disclosed on its official Weibo account that it gained a “best delivery award” from diary producer Mengniu in 2017 .
Xianshenghuo operates an online platform called Yunlizhi, which allows clients to order and pay the transportation service online and track their goods 24 hours. The firm now has a total of 45,000 self-owned or third-party cold-chain vehicles, as well as 50,000 drivers, and has built up 120,000 square meters of warehouses space.
The fundraising comes at a time when the online purchase of fresh food is increasing fast in China as more and more people are shifting to on-demand grocery delivery platforms such as JD Daojia, MissFresh, Dingdong Maicai, or community group-buying platforms such as Duoduo Maicai, Chengxin Youxuan, Jingxipinpin, and Meituan Youxuan, which allow buyers to pick up their goods in a physical location the next day.
The uptick in demand for fresh product transportation is helping cold-chain companies to reduce costs, as the density of its cargo is increasing, said Xianshenghuo.
“The fresh food cold-chain sector doesn’t have many players so that the competition is not harsh, but the market is very large,” Zhuang Shuai, a retail veteran and founder of Balian Consultancy told KrASIA on Tuesday. He further mentioned that these logistics companies can add revenues by serving medical firms as well.