E-Commerce Platform Missfresh Completes Strategic Financing of $29M
Missfresh, a Chinese fresh food e-commerce platform, announced on Friday that it has reached a strategic investment cooperation agreement with Shanxi Donghui Group, which plans to invest equity worth 200 million yuan ($29.58 million).
The announcement said that through this partnership, Missfresh and Shanxi Donghui will exchange resources and best practices related to agriculture operations, sales and marketing, carrying out a series of strategic cooperations in the whole industrial chain, such as brand agriculture and order agriculture.
Founded in 2014, Missfresh pioneered the pre-warehouse operation mode and was listed on the Nasdaq in June 2021. Its main business is “Ultra-Fast Delivery,” sending fresh food and daily necessities in the shortest time of 30 minutes. Meanwhile, “Next-Day Delivery” is an innovative business launched by the firm to expand commodity categories, with a relatively small revenue share. In addition, the current business lines of the firm also include the smart food market and retail cloud.
However, the company has mired in losses for a long time now. From 2018 to 2020 and the first three quarters of 2021, the company’s net losses were 2.232 billion yuan ($330.1 million), 2.909 billion yuan ($430.2 million), 1.649 billion yuan ($243.9 million) and 3.017 billion yuan ($446.2 million), respectively. In three years and nine months, the company had a total net loss of 9.808 billion yuan ($1.45 billion).
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Due to these long-term losses, the firm’s capital situation is not favorable, and the cash generated from business operations is always in an outflow state, so the operation basically needs to be completed by financing. As of the end of 2019 and the end of 2020, the company’s asset-liability ratio exceeded 100%, and it was in an “insolvent” state. In addition, by the end of September 2021, the ratio was still at a high level, although it has improved slightly. The delayed submission of its annual report may increase investors’ speculation on the company’s performance.
In addition, Missfresh has received two warning letters from the Nasdaq since the middle and the end of May, because it failed to submit the 2021 annual financial report on time, and the company’s stock was continuously less than $1 for one full month. The company also encountered scandals that it was forced to pay the bill by the court because of a delay in the supplier’s payment.