Exclusive: Sequoia Values SaaS ERP Vendor Jushuitan at USD 847 Million
The software company helps millions of Chinese SMBs to manage their business online.
Chinese e-commerce software company Jushuitan is said to be closing a new round of financing that values the company at a staggering CNY 6 billion (USD 847 million). The lead investor Sequoia led a Series B3 round for Jushuitan in March 2019, and is continuing to inject money into China’s burgeoning Software-as-a-Service (SaaS) landscape.
Both of the two publicly-listed Chinese leaders in the niche market of retail SaaS – Weimob (2013:HK) and Youzan (8013:HK) – have achieved the milestone of a USD 10 billion valuation on the public market. The booming Tencent mini-program ecosystem drives success, along with a swelling number of retail enterprises and their willingness to pay, with smaller entities like Jushuitan also likely benefiting consistently.
Jushuitan was selected for our China Industry Internet map 2019 (read more)
Different from Weimob and Youzan, which build businesses firmly in the field of Tencent, Jushuitan is an Enterprise Resource Planning (ERP) software provider that targets enterprises selling on different third-party platforms. The ERP system adopts a 12-module design, including everything from supply chain retailers, order management, warehouse and procurement to after-service.
We see SMB Tech as a rising trend with good potential value for companies to crack. (read Weimob’s initiation coverage here)
Founded in 2014, the company has now established its business around the core ERP software with various business-facing services. Chinese tech media channel 36Kr reported that the firm had bagged CNY 150 million (USD 21 million) for selling SaaS products in the first half of 2018. It is expected to earn more than CNY 300 million in 2018.
The company expanded its salesforce to 1200 as of the end of 2019 from 900 in early 2018, reflecting a highly growing business. 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.
During the coronavirus 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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