Textile Trading Platform Baibu Completes USD 300 Million Series D
The fresh financing event saw the highest funding amount ever recorded in a single round in China's textile industry.
Baibu (百布) announced it has completed its Series D round of funding. The textile industry innovators collected USD 300 million on December 16 in a round led by DST Global, with CICC Capital (中金资本). Existing investors Source Code Capital (源码资本), Tiger GlobalInvestments (老虎环球基金), YunqiPartners (云启资本), Chengwei Capital (成为资本) and Bull Capital Partners (雄牛资本) were also named as contributors.
Founded in 2014, the Guangzhou-based company is a leading player in China's textile industry. It runs in a Business-to-Business (B2B) context, providing intelligent supply chain management services through its self-operating platform to enterprises in the sector.
The textile service provider has two major business segments, namely:
1. Connecting upstream grey fabric factories and first-level wholesalers and jointly building smart cloud factories for grey fabric production;
2. Linking first-level wholesalers and downstream small- and medium-sized manufacturers, to set up finished cloth trading platforms together.
The pain points of China's textile and cloth market –over one trillion yuan in market size – tend to be straightforward:
1. The upstream grey fabric mills have a low operation rate – using industrial looms only when large orders demand it, for instance, and seldom running these at max capacity. Meanwhile, raw materials like cotton yarn tend to have high purchasing costs;
2. There are a large number of first-level wholesalers located in the middle stream who undertake the bulk of fabric design, production organization and inventory restocking along the chain. These actors face a relatively high risk through concentration of inventory;
3. Owing to a lack of transparency, the small- and medium-sized apparel manufacturers who occupy most of the downstream market suffer from high Cost of Goods Sold, which is reflected in inflated purchasing costs for finished fabrics and low procurement efficiency.
These issues bring opportunities to Baibu's business. The company cut into the textile industry, positioning itself as a one-stop industrial supply chain platform for supporting services. Storage upgrades, logistics management and financial services can all be accessed.
Specifically, its strategy lies in two dimensions: 1. Leveraging the Artificial Intelligence of Things (AloT) and Software-as-a-Service (SaaS) technologies, the company digs into the supply chain vertically to provide solutions to each ‘node’ in their network; 2. Meanwhile, it is expanding horizontally to cover more functions – financial services, for example –and reinforce the concept of a ‘one-stop solution’ for textile players.
Up to now, Baibu has realized nearly CNY 10 billion in sales volume. It maintains more than 100,000 (expected to reach 400,000 by 2020) AIoT looms, or about 8% (expected to surpass 26% by 2020) of the Chinese textile industry’s total amount, and covers 70% of the finished fabric category that the first-level wholesalers distribute.
Mr.Xu Kun (徐锟), Director of China Renaissance (华兴资本), the exclusive financial advisor of Baibu’s Series D, outlined in his company’s official WeChat account how SaaS and AIoT are enabling Baibu to make such rapid upgrades in the efficiency of textile companies.“[Baibu] generates positive transaction cycles through its highly efficient approach to industrial management, integrating both warehousing and distribution.”
Mr. Xu noted the connections between the upheaval in textiles and the great developmental shifts of the past, noting that “Technology is the biggest driving force in industrial revolutions.”