With its sixty-million-strong user base, the social commerce startup is one of the largest of its kind countrywide.
Guangzhou-based two-year-old social commerce platform Peanut Dairy (花生日记) raised CNY 300 million (USD 42.52 million) in its Series A+ financing round led by Qixing Capital (起行资本) on August 19. The total amount of funding received by the firm has thereby reached USD 72.52 million.
The new funding round was announced at the company’s second-anniversary celebration. This is also the second financing event in the firm’s history: it completed a Series A round, obtaining USD 30 million from unknown investors, in April 2018.
Peanut Dairy is a “smart sharing” social commerce shopping guide platform providing one-stop shopping solutions. It offers various coupons, discounts, and promotional codes, attracting users from immense consumer groups such as lower-middle-class households living in third-tier cities.
Referral system – another trait of the platform – made it vulnerable to the regulatory risks. Earlier this year, the company got fined CNY 1.5 million (USD 212,586) by Guangzhou Industrial & Commercial Bureau, which was concerned about possible pyramid schemes. According to the watchdog, Peanut Dairy had gained over CNY 73 million of illegal revenue as of March 2019.
China, having comparatively low levels of both financial education and risk awareness, is lately serious about financial schemes, repercussions of which are often grotesque.
As one of the company’s executives said, the fresh capital will be thrown at new business direction such as travel and online education. Aside from that, the firm plans to launch an incubator-like program for small shops. CNY 100 million (USD 14.17 million) will be poured into this project to generate over 10,000 business units having annual revenue of over CNY 1 million (USD 141,700) by 2020.
According to the Internet Society of China and Chuangqi Social Commerce Research Center, the country’s social commerce market size is projected to reach as high as CNY 2.07 trillion (USD 293.21 billion) in 2019, driven by increasing penetration of mobile technology and growing low-middle-class consumer groups.