Steel trading platform Ouyeel (欧冶云商) has closed its second round of equity financing, Shanghai United Asset and Equity Exchange announced on June 27. Founded in 2015 and backed by state-owned China Baowu Steel Group (宝武集团), Baoshan Iron and Steel Co., Ltd. (a.k.a. Bao Steel, 宝钢股份), and Shanghai Baosteel International Economic & Trading Co., Ltd. (宝钢国际), the firm is an e-commerce platform that connects buyers and sellers of steel.
In this round of financing, eight investors, mostly state-owned manufacturing companies such as Beijing Jianlong Heavy Industry Group Co., Ltd.(北京建龙重工集团有限公司), aimed to inject CNY 2.02 billion (USD 294 million) into the firm. CITIC Securities (SSE: 600030) and government guide fund Shenzhen China Merchants Capital were also involved in the transaction.
In May 2017, the firm introduced private and overseas investors ranging from logistics giant GLP and Shougang Capital (首钢基金) – also an investor of Ouyeel’s rival Zhaogang.com (a.k.a. Steelsearcher, 找钢网), to CCB Trust Co., Ltd (建信新托) and Japanese behemoth Mitsui & Co. (MITSF) in a deal amounting to CNY 1 billion (USD 150 million).
Thanks to the commodities resources possessed by its backers Baowu Group, the firm has developed by leaps and bounds over the past few years. In 2018, it generated 118 million tons of GMV (Gross Merchandise Volume). However, the company was in the red: It lost CNY 290 million (USD 43.5 million) in 2016 and CNY 110 million (USD 16.5 million) in the first half of 2017. Rival Zhaogang.com also chalked up huge losses from 2016 and 2018, which stood ar CNY 1 billion, CNY 822 million, CNY 123 million, its prospectus shows. Zhaogang dropped dual-share class structure last November and withdrew its IPO plan in Hong Kong this May.