BabyTree, an online community for early care and education, has secured over $300 million USD in funding. They will use the latest injection to extend their e-commerce operations with the help of their new investors, said the company. It’s the highest round ever recorded by a Chinese company in the maternity and baby market, highlighting booming growth in the sector.
Chinese online cosmetics retailer Jumei has agreed to provide BabyTree with a convertible loan and a revolving credit facility of up to 1.55 billion RMB ($250 million USD), making up the majority of the recent investment. An additional $50 million USD capital was raised from several other unnamed domestic institutions, reaching a final value of $300 million USD. In January 2014, Chinese after-school tutoring services firm TAL Education Group acquired undisclosed amount of minority stake in BabyTree for $24 million USD.
With an annual increase of over 16 million population, China is world’s second largest market for mother and baby products, second only to the U.S., according to a report by China E-commerce Research Center. The center predicted that the market is going to be worth 100 billion RMB to 200 billion RMB by 2015.
The booming market has drawn crowds of companies and some significant investments. Alibaba purchased a 9.2% stake in U.S. flash sale site Zulily earlier this year. Mia, a Chinese e-commerce site specializing in items for infants, toddlers, and moms, received a $60 million USD in series C last year, while its competitor Beibei raised a $100 million USD series C funding at a valuation of nearly $1 billion USD earlier this year.
BabyTree is a leading Chinese digital resources and community for maternal and childcare services. The company provides all-round professional information on baby care and health. It now currently claims to have over 10 million daily active users between BabyTree.com, the company’s desktop website, along with mobile apps “BabyTree Pregnancy” and “BabyTree Footprints.”
With the new funding, Babytree plans to develop its own e-commerce platform, which explains the massive amount invested. The tie-up will bring together enormous user base of BabyTree and Jumei’s supply chain and logistics expertise in cross border e-commerce to create a premium e-commerce platform.
Jumei has been facing heavy pressure from domestic competitors like VIPshop, which acquired a major stake Jumei’s direct rival LAFASO last year, in retaining its position as China’s top online cosmetics retailer. Since the end of last year, the U.S.-listed company is shifting focus to the cross-border e-commerce market, of which maternity and baby product accounts for a major part.
After recording a strong growth in its cross-border e-commerce platform Jumei Global, the company has set an ambitious goal of 75% month-over-month growth for Q2, 2015.
Mr. Leo Ou Chen, founder and CEO of Jumei, said that Jumei will open several core resources to BabyTree, including overseas merchant partners, storage, and delivery. A management group led by Jumei co-founder Dai Yusen will also provide professional guidance to the new e-commerce unit of BabyTree.
Image Credit: Shutterstock