Tencent-backed Chinese Used Goods Marketplace Zhuanzhuan Raises $300M Series B

Chinese online used goods trading marketplace Zhuanzhuan announced last night that it has raised a massive $300 million Series B from its parent company 58.com and Tencent Holdings.

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The round comes nearly two and a half years after the company raised a $200 million Series A from Tencent Holdings at a post-money valuation of $1 billion, according to its Crunchbase profile.

58.com, which is described by Chinese media as the country’s “largest online marketplace,” will remain Zhuanshuan’s majority shareholder, according to the release. 58.com is listed on the NYSE, having gone public in 2013.

Founded in 2015, Zhuanzhuan’s “platform records more than 10 million user transactions annually,” according to China Knowledge. It’s been described by some as an “online flea market” in the “re-commerce” industry since it features only secondhand goods.

Zhuanzhuan CEO Huang Wei said “in an open letter” he hoped “the cash injection would help the company ‘survive’ a challenging business cycle and intense competition,” reported CX Tech.

Indeed, the popularity of secondhand marketplaces continues to increase globally. In the United States, luxury consignment platform TheRealReal is an example of a company in the space that went public this year after reporting revenue of $207.4 million in 2018, up 55 percent compared to 2017. In April, we reported on how another fashion resale marketplace Poshmark was reportedly eyeing an IPO that could take place as early as this fall.

The Zhuanzhuan raise touches on several trends that we’re tracking at Crunchbase News. Namely the decline in China’s share of supergiant ($100 million and larger) rounds, and the growth of supersized early-stage rounds. By managing to be a tectonic Series B, Zhuanzhuan’s latest capital raise is downright interesting.

As is the context the company provided for its round. This new money isn’t merely for expansion or hiring, but instead will help Zhuanzhuan “survive.” As China’s economy slows alongside the United States’ own, we may see more rounds of a similar nature with a similar explanation.

Illustration: Li-Anne Dias