SEAVI Advent Private Equity today announced that its latest fund, SEAVI Advent Equity VII (Special Situation) Fund I has completed a HK$27 million investment into Huitongda Network Co., Ltd (the “Company”, Stock Code: 9878.HK), a leading B2B commerce and SaaS platform dedicated to serving business customers, including retail stores and wholesalers, participating in China’s lower-tier retail market.
Founded in 2010, the Company facilitates online and offline commerce transactions and offers SaaS+ and merchant solutions for participants along the lower-tier retail market value chain, in which wholesalers and retail stores play large roles. Over the years, the Company has developed more than 57,000 member stores in its network, covering 21 provinces and over 20,000 towns and villages across China.
The Company’s commerce business provides a procurement platform with six categories including household appliances, consumer electronics, agricultural means of production, vehicles and auto parts, homebuilding and renovation materials, and liquor and beverages and more than 175,000 SKUs. Small retail stores register to become member stores of the Company to enjoy the benefits and convenience of merchandise procurement from the Company. The member store network provides a large customer base for the SaaS business to cross-sell SaaS+ products and digital business solutions which assist the member stores in digital transformation and increase stickiness with the Company. The commerce and SaaS businesses work in tandem to create a flywheel effect which promotes further value and growth potential through stronger connection among the suppliers, distributors, retail stores, consumers and other participants within the lower-tier retail market value chain.
China’s lower-tier retail market is massive with a market size of RMB15.1 trillion in 2020 and represents approximately 79.2% of China’s overall retail market. However, at the same time, the lower-tier retail market is highly fragmented and plagued with low levels of digitalization and less developed logistics infrastructure, resulting in low efficiency in the industry. According to Frost & Sullivan, the Company is ranked first in terms of transaction value of commerce business in the lower-tier retail market with market share of less than 1%.
The Company’s first-mover advantage in the lower-tier market and innovative B2B2C business model puts it in a good position to revolutionize existing mom-and-pop retailers through digitalization upgrade and capture strong growth potential within the massive lower-tier retail market. SEAVI Advent sees strong potential in the Company, and believes it will continue to solidify its position as a leading player in their industry.
About SEAVI Advent Private Equity
SEAVI Advent Private Equity, the independent Asian associate of Boston based private equity firm Advent International Corporation, is one of the first private equity and venture capital firms to operate in the Asia Pacific region. Since 1984, the firm has invested over US$600 million into more than 120 Asian companies, from growth to late stage, as well as buyout and control transactions. With a proven track record that includes ranking fourth on Preqin’s Top 10 performance funds for the vintage 2003/04, SEAVI Advent has been instrumental in delivering value to many of its portfolio companies, and has developed an extensive record of successful investments, which include Universal Health International Group (2211.HK), Hainan Shuangcheng Pharmaceutical Co. Ltd (002693.SZ) in the healthcare sector; Weimob Inc. (2013.HK), and Sinofriends in the TMT sector; Tsaker Chemical (1986.HK), and Pengyao Group (300664.SZ) in the new energy & advanced manufacturing sector. In recent years, SEAVI Advent has strengthened its emphasis on B2B technology and the SaaS sector as it believes that China’s digital transformation of enterprises is gathering pace and showing immense growth potential in the world’s second largest economy. SEAVI Advent Equity VII (Special Situation) Fund I is a sub-fund registered under SEAVI Advent Equity VII Fund VCC, an umbrella Variable Capital Company that invests in non-control public securities and profitable late-stage private companies.