An employee harvests organic tomatoes in a greenhouse. (Photographer: Qilai Shen/Bloomberg)

A China Veggie-Selling App May Be Worth $7 billion

(Bloomberg) -- Meicai, a Chinese startup that helps farmers sell vegetables to restaurants, raised at least $600 million in a funding round led by Tiger Global Management and Hillhouse Capital, people familiar with the matter said.

The money will be used to expand as the startup competes for a bigger share of China’s fragmented food sourcing market, the people said, asking not to be identified as the details are private. According to one person familiar with the matter, the company raised about $800 million at a valuation of about $7 billion. Meicai was said to be valued at about $2.8 billion pre-investment in its previous funding round in January.

Meicai, which means “beautiful vegetable,” was founded in 2014 by Liu Chuanjun, a rocket scientist who set a goal of sourcing produce for about 10 million small- and medium-sized restaurants in China. Using a smartphone app, customers can order specialties such as bok choy and Sichuan peppercorns directly from farms, disrupting traditional wholesaling by cutting out middlemen. As of the end of last year, Meicai served close to a 100 cities revenue had surpassed 10 billion yuan.

Meicai and Hillhouse declined to comment on the fundraising in emailed statements. Tiger Global’s external public relations agency didn’t respond to an emailed request for comment.

The funding round is among the largest for a Chinese startup this year. Full Truck Alliance, the country’s biggest app for Uber-like long-haul services, raised $1.9 billion in April while Pinduoduo Inc., the Chinese social e-commerce company, raised more than $1 billion in the same month before holding its initial public offering.

Liu, 36, was born in the rural areas of Shandong province, often helping his family maintain their corn field growing up. As one of the few people in his village to make it to university, he studied astrophysics at the Chinese Academy of Sciences and worked on rocket projects including China’s Shenzhou spacecraft, according to the company.

Beijing-based Meicai counts Genesis Capital, GGV Capital and China Media Capital among its existing investors. The funding underscores the lofty valuations that first-tier Chinese companies are still fetching, despite a slump in local equity markets and a freeze in yuan-denominated fundraising.

©2018 Bloomberg L.P.