Goldman Sachs Leads the Round as Jushuitan Nabs USD 100 Million
COVID-19 and China
Data center. Image credit: Robert V. Ruggiero/Unsplash

► This round will take the firm's valuation above USD 1 billion.

► Proceeds of the round will be used for upgrading and optimization of product and service systems. 

E-commerce SaaS ERP (Enterprise Resource Planning) service provider Jushuitan today announced the completion of a USD 100 million C round of financing. The round was led by investors including Goldman Sachs, CCIG Capital and previous investor Blue Lake Capital with Taihecap as the exclusive financial advisor. 
According to Luo Haidong (骆海东), founder and CEO of Jushuitan, the capital raised will be used for product and service system upgrades and optimization, collaborative supply chain building, overseas market expansion, and SaaS collaborative ecosystem investment and M&A.

“China has raised e-commerce giants not less powerful than Amazon and Facebook, but the development of enterprise services, especially SaaS, is lagging behind the US by 5 to 10 years. After doing in-depth research, Goldman Sachs believes that China is gradually ushering at a turning point of SaaS industry,” said Sun Mengxi (孙梦曦), managing director at Goldman Sachs. “We are optimistic about the development of the Chinese e-commerce market, and Jushuitan is taking the e-commerce SaaS ERP service as an entry point and is gradually moving towards the e-commerce ecosystem. The team has rich experience and innovation in the industry and has found a suitable economic model while creating value for customers. Goldman Sachs looks forward to Jushuitan, bringing customers continuously upgraded products and experiences, and growing together with partners in the e-commerce and retail ecosystems.”

Established in January 2014, Jushuitian is an ERP software provider that targets enterprises selling on different third-party platforms. While continuing to consolidate the market share of the domestic core business, Jushuitan is also making continuous exploration and layout around the core business product matrix, collaborative supply chain and overseas markets. 

The company expanded its salesforce to 1200 as of the end of 2019 from 900 in early 2018, reflecting a highly growing business. It has set up more than 60 offline service outlets across the country, covering more than 300 cities. Sequoia, like any other investment firm, is betting on the firm’s revenue growth and will give premium revenue multiples to startups. Youzan, for instance, was trading at a 9.83 revenue multiple as of March 24, 2020.

Prior to this Jushuitian raised a total of seven rounds of financing with the latest Sequoia capital-backed investment valuing the company at a staggering CNY 6 billion (USD 847 million). 

As mentioned by EqualOcean in an article published recently, during the COVID-19 outbreak, an increasing number of retailers and even shopping mall operators are working relentlessly to enrich online shopping functions for their clients. Leveraging SaaS providers certainly accelerates the process and leads to better results. As a result, SaaS-themed startups are at the front of investors’ minds these days.

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