China-based personalised e-commerce platform Mogujie raised $200m in a series D round today backed by investors including IDG Capital Partners, the Chinese corporate venturing subsidiary of media company IDG that closed a $586m fund this week, illustrating the explosive growth of the Asian e-commerce sector.
The round, which reportedly valued Mogujie at $1bn, also included the Goldman Sachs-backed Magnolia Fund, private equity firm Hopu Fund, venture capital firm Qiming Venture Partners, TBP Capital and Banyan Funds.
IDG first invested an undisclosed sum in Mogujie’s 2012 series C round. Mogujie previously raised $10m in a 2012 series B round from Qiming and media company Bertelsmann’s Asian investment fund, the latter of which contributed to a $1m series A round in 2011 that also featured VC firm TrustBridge Partners.
Launched in early 2011, Mogujie initially followed a similar path to US-based online site Pinterest, which interestingly also raised $200m recently, albeit at a $5bn valuation, operating as a social network that enabled a mainly female user base to share pictures and links to each other based on what they enjoyed or found stimulating.
A few months ago Mogujie expanded its activities to a retail platform that allowed products to be sold directly to its users, and the company plans to direct the series D funding to building up that side of its operations.
Mogujie’s series D is part of a raft of large recent funding rounds in the e-commerce sector outside the US, and not just in China, where Alibaba has grown into a monolith, expanding into several other online and offline services in order to expand its product offering,.
Flipkart raised $210m last week shortly after acquiring Myntra, another India-based e-commerce player, in a $300m deal, while its compatriot Snapdeal secured $100m in a late stage round a few days before.
One of Russia’s largest online retailers, Ozon, also closed a big funding round last month, raising $150m, and Naspers invested $75m in United Arab Emirates-based Souk in March.
The wider e-commerce sector is growing quickly in what are referred to as emerging markets because of an expanding middle class and economies that are now rapidly moving online. Because of their size the larger investments have been the most eye-catching, but there has also been a raft of smaller deals for two kinds of more specialised startups.
The first consists of companies that are replicating business models already seen success in the west, and these businesses are seeing investment not just from other Asian firms but also western investors such as Amadeus Capital Partners, which told Global Corporate Venturing its new fund will target startups transferring established online service models to growing economies, and Rocket Internet, which has formed a joint venture with telecommunications company Ooredoo for that precise purpose.
The second group is made up of specialists that are developing original offerings based on localised needs, like SIG-backed Fruitday, which sells fresh imported fruit to a Chinese customer base that cannot buy the product in a brick and mortar store.
Mogujie is straddling both of these groups, building on an established model by adding a direct retail element that is innovative. More established western rivals have been slow to enter markets such as China and India because of local differences, which has given the local players a head start, and it will be interesting to see how they can now grow and expand their offerings as the sector develops.