Xiaohongshu, a China-based e-commerce platform that counts internet group Tencent among its investors, has entered talks to raise at least $200m at a valuation of more than $2.5bn, Bloomberg reported today.
Founded in 2013 and also known as Little Red Book, Xiaohongshu runs an e-commerce platform that works similarly to the retail branch of social media company Pinterest.
The company allows users, most of which are young women, to post pictures of desired products which can be shared with others who can buy them through links. It began as a review platform for foreign-bought fashion items before subsequently pivoting.
Tencent participated in Xiaohongshu’s last round in 2016 when it raised $120m from a consortium that also included venture capital fund ZhenFund and VC firms GGV Capital and GSR Ventures at a $900m pre-money valuation.
ZhenFund and an undisclosed US-based investor had provided a seven-figure dollar sum for the company’s 2014 series A round, before it secured more than $10m in a 2015 series B led by GGV Capital.
Xiaohongshu is raising the funding as it gears up to open its first brick-and-mortar store in the city of Shanghai in June this year. Co-founder Miranda Qu told Bloomberg earlier this month it has increased its monthly active users by 40% from the end of 2017 and expects to soon reach 100 million users.