(Bloomberg) -- Investors including Tencent Holdings Ltd. and private equity giant Primavera Capital are joining a funding round that values Chinese grocery delivery upstart Xingsheng Youxuan at $3 billion, people familiar with the matter said.
The two companies are bankrolling one of the more recent entrants to a sector galvanized by the pandemic. The latest financing of about $300 million for Xingsheng Youxuan triples the company’s price tag from its last funding round in 2019, the people said, asking not to be identified because the information is private. Tencent -- which also backs grocery-delivery rival Missfresh -- will participate though it hasn’t decided on how much capital to put in, one of the people said.
The latest fundraising precedes an eventual initial public offering though neither timeframe nor venue has been finalized, they added. Tencent and Alibaba Group Holding Ltd. are bringing their multifaceted competition to the burgeoning realm of online fresh produce. Xingsheng Youxuan, which loosely translates as “prosperous first choice,” is among a group of online services that’ve benefited from people confined to home during Covid-19 crisis.
Based in the central province of Hunan, it focuses on delivering produce from seafood to noodles to some 400 towns from western Sichuan to Guangdong in the south, but is just one of a plethora of deep-pocketed players including Alibaba and Meituan.
Its current round of financing is slated to finish in July though details may change depending on Tencent’s investment amount, the people said. Representatives for the startup and Tencent had no immediate comment when contacted. Primavera said it won’t comment on market rumor.
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