Social commerce platform fined for pyramid scheme raises RMB 300 million

Peanut Diary has admitted “non-compliance” in its early stage of development.

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Peanut Diary, a social commerce platform based in Guangzhou, announced on Sunday the closing of an RMB 300 million (about USD 42.5 million) Series A funding round from sole investor Qixing Capital, according to the Economic View.

The platform said it had more than 60 million registered users and its trading volume exceeded RMB 42 billion as of July 2019.

Yang Xianqiang, the founder of Peanut Diary, said his company would use the funds raised to make forays into various sectors ‘mobility’ (which could see it moving in to ride hailing), online education, and introduce subsidies worth RMB 100 million to promote star sellers.

Earlier this year, the local market regulator in Guangzhou fined the platform RMB 74.5 million for allegedly running pyramid schemes which set up multiple marketing levels and reward members with commissions for recruiting “down-line” users.

Peanut Diary, which was founded in 2017, admitted “non-compliance” in the early stage of its development at the time.

Not much is known about the investor Qixing Capital and it appears to have no public track record of its investments and exits.