The Chinese online grocery app Xingsheng Youxuan has raised $2 billion in new funding, Reuters reports. According to Reuters’ sources, investors in the round include FountainVest Partners, Primavera Capital Group and KKR & Co. The new funding values Xingsheng Youxuan at $6 billion, but companies involved did not confirm details with Reuters.
Founded three years ago, Xingsheng Youxuan fulfills online bulk orders to grocery stores in or near residential areas. Xingsheng Youxuan operates in 13 provinces and covers more than 6,000 counties and 30,000 towns. The company gets more than 8 million daily orders.
As with the U.S., online grocery shopping in China skyrocketed last year thanks to the pandemic. While there are vaccines being distributed and (hopefully) the pandemic will recede this year, online grocery shopping is expected to remain sticky with consumers. Grocery e-commerce is predicted to hit $250 billion and take up 21.5 percent of all grocery sales in the U.S. by 2025.
While Xingsheng Youxuan’s new round is by far the biggest single funding round into a grocery company we’ve seen, a lot of investor money has poured into the grocery space around the world over the past year:
- Weezy raised $21 million for grocery delivery in the UK
- Gorillas raised $44 million for grocery delivery in Germany
- Here in the U.S., Good Eggs raised $100 million, Farmstead raised $7.9 million, and Instacart raised $425 million (it has raised a total $2.4 billion)
We are also seeing increased investment by established players to bolster their online ordering and fulfillment infrastructure. Walmart and Ahold Delhaize recently made moves to expand their use of automated fulfillment centers, for example. And Kroger is set to open up the first of their 20 planned automated customer fulfillment centers across the U.S. this year.
All of this is to say that 2021 is shaping up to be a transformational year for grocery all around the globe.