Xiaohongshu, the China-based social commerce platform backed by e-commerce firm Alibaba and internet group Tencent, has begun talks to raise $400m to $500m in funding, Bloomberg reported on Friday.
The prospective round would value the company, also known as Little Red Book, at roughly $6bn, according to people familiar with the matter. It has working with an adviser and is feeling out potential participants.
Founded in 2013, Xiaohongshu operates an online platform with 300 million registered users as of July 2019 that enables users to demonstrate and recommend cross-border consumer products. Users can also post images and videos detailing their consumer-based lifestyle choices.
The company entered talks with firms including Sequoia Capital and Hillhouse Capital to raise up to $500m in 2019 but postponed the round after its app was temporarily removed from Chinese app stores in July. It was reinstated in October without a public explanation for the regulatory decision.
The last funding to be raised by Xiaohongshu consists of a $300m series D round in mid-2018 that was led by Alibaba and backed by Tencent, Genesis Capital, GGV Capital, ZhenFund, GSR Ventures, Tiantu Capital and Adrian Cheng, valuing it at $3bn.
ZhenFund took part in a seven-figure series A round for the company in 2014, and it added $10m in a series B led by GGV Capital the following year. Xiaohongshu subsequently secured $120m in a 2016 series C round featuring Tencent, GGV Capital, ZhenFund and GSR Ventures.
