D2C brand has become the high-frequency word of venture capital news at home and abroad in 2021.
In the United States, the birthplace of the D2C concept, the D2C brand is intensively listed. In January, Hims&Hers, a telemedicine company, was listed on the New York Stock Exchange; In August, the glasses brand Warby Parker officially submitted its listing application to the SEC; In September, Allbirds, a footwear and clothing brand focusing on environmental protection and fashion sports, released its listing documents。
The trend of the secondary market on the other side of the ocean made Chinese entrepreneurs and investors smell the opportunity of collective gold digging. A large amount of hot money poured into the D2C brand track in the second half of the year. Cider, Halara (full speed and full volume), PatPat and other projects have successively completed financing of hundreds of millions of dollars. The fast fashion brand giant SHEIN has entered the public view, which has also added to the popularity of D2C.
There are many well-known investors. First, Softbank invested $160 million in the exclusive mother baby brand PatPat, and then a16z entered the fast fashion brand Cider. The Internet giant has not lagged behind. In June this year, ByteDance's affiliated company Quantum Jump completed its strategic investment in clothing brands; In the home appliance race track, Xiaomi Group and Shunwei Capital started several projects including LUCY LEE, CosBeauty, Shunzao Technology, etc.
At the same time, with the rise of brand awareness of cross-border e-commerce players, the service providers that help export e-commerce in multi-channel layout will also compete for capital favor in 2021.
So, how about the financing situation of Sailing D2C brand this year? Which VCs are selling intensively? How are the service providers developing? 36 Krypton Sailing made an inventory of the projects that have been financed in 2021 according to the public information, hoping to provide valuable information for readers who are paying attention to the D2C brand.
Note:The data in this paper are incomplete statistics based on public data.
2021 Sailing D2C Brand Financing Event
Observation on investment and financing of Sailing D2C brand
Of the 62 financing projects involved in this inventory, 33 were ten million yuan (USD equivalent to RMB) financing events, accounting for 53% of the total number of statistical projects. In addition, there were 14 billion yuan financing events, mainly focusing on clothing accessories and beauty and makeup racetracks, accounting for 23% of the number of statistical items; There were 8 million yuan financing events, accounting for 13% of the statistics items; The financing amount was not disclosed in 7 cases.
Among the 36 krypton outbound projects, the project with the highest total financing amount of outbound D2C brand in 2021 is PatPat, the children's clothing brand, with an annual total financing amount of 670 million dollars. Among them, Series C+and Series D raised a total of 510 million dollars, and the leading investors are Today Capital, General Atlantic, CDH Baifu, DST Global, etc; The D+round was exclusively invested by Softbank with an amount of 160 million dollars.
From the perspective of financing stage, most of the projects involved in the above table are concentrated in the round A stage, with 28 cases in total, nearly half of them. The number of financing projects in the middle and late stages is relatively small. After Round A, the number of financing projects drops rapidly. According to incomplete statistics, there are only six rounds of financing in Round C and Round D, and three of them are collected by PatPat. To some extent, this shows that the business model of D2C has been preliminarily verified at the Sailing Track, but the profitability of most projects may still be insufficient.
From the track point of view, among the projects involved in this paper, the investment and financing of beauty and cosmetics is the hottest, with 14 financing projects, accounting for about 23%; The second is clothing accessories, with a total of 13 financing, accounting for about 21%. The rest are home appliances 9 times, home furniture 7 times, sports peripherals 5 times, mothers and children 5 times, 3C accessories 4 times, food health 3 times, pet services 2 times.
At the level of investment institutions, many star institutions frequently appeared at the sea track, and Shunwei Capital, Today Capital, GGV Jiyuan Capital, DST Global, Sequoia China, etc. were active. At the same time, Internet giants are also unwilling to lag behind in the sea going tide. Both ByteDance and Xiaomi have started to lay out the corresponding track.
Since this year, several overseas D2C brand projects have gained continuous capital increase. In this statistics, Cider, Outer, HappieWatch, UNOMI, Nothing and other projects have all received two rounds of financing. PatPat and Moody have also received three rounds of financing within one year, and the financing amount is 100 million yuan.
On the whole, outbound brands have once again become the darling of capital, but D2C is not a new story. At present, the popularity of outbound brands may be due to the closure of Amazon stores, or it may be a harbinger of China's cross-border e-commerce entering a new stage. In any case, brands have many historical problems and unknown challenges to face.
From the follow-up stories of the predecessors of the American D2C brand, while pursuing the D2C model, the overseas brands still need to study how to solve the problems caused by traffic bottlenecks and too detailed product classification after leaving the platform in the future. For example, the founder of DTC mattress brand, Casper, announced the privatization and delisting this year. The listing time was less than two years, and the market value before delisting was only about 150 million dollars.
Although the D2C model has effectively solved various problems caused by the excessive strength of the platform, it has also accelerated the process of China's manufacturing industry going to sea to a certain extent, but how to maintain high growth, how to achieve profitability, how to expand categories and other issues will be the next questions to be answered by the outbound D2C brand.
List of service provider financing
D2C mode, the support of independent stations is indispensable, and the realization of cross-border trade cannot be separated from the maturity of service ecology. The rapid expansion of the overseas D2C brand has also attracted many service providers in 2021, among which business management, logistics warehousing and other links have attracted the attention of investors.
Among the 36 krypton outbound statistics projects, there will be 41 financing events for D2C brand related service providers in 2021, covering the supply chain, operation and management, brand marketing, financial payment, logistics and warehousing and other key outbound links. Among them, many manufacturers, including Jijia ERP, SparkX Yiyan Technology, Airwallex, Surpath, etc., completed several rounds of financing this year.
At present, due to the universality of business management, warehousing and logistics, and financial payment, service providers are mostly covered by both platform and independent station sellers, with a large market scale. Therefore, the business models of the projects that have completed the financing of the aforementioned track are relatively mature, and the rounds are concentrated after Round B, and the amount of financing is mostly tens of millions of dollars.
For D2C brand, brand marketing is a very special and important link. In the European and American markets, due to the relatively mature development of D2C brand, brand marketing service providers have formed an independent ecology of division of labor, covering search engine, email marketing, social advertising, celebrity marketing, marketing promotion, alliance marketing and other links. However, due to the late start of the D2C brand in China, there are few players at the top of the brand marketing track, but there are still a few projects that have been preliminarily recognized by the capital, such as COZMOX, a popular marketing service provider, and Pongo, a content marketing service provider.
In 2021, it is worth noting that the station building SaaS will serve as the basis for building independent stations. In the disclosed projects, no new funds have flowed into the station building tool track. Part of the reason behind this is that there are many links involved in building a website and the resources required are huge. At present, most domestic service providers rely on listed companies or leading players in the relevant fields of sailing. For example, SHOPLINE is a platform for gathering, FunPinPin is born out of Papaya Mobile, and AllValue has a good reputation.
At present, the station building tools adopted by D2C brand are mainly Shopify and WooCommerce, which are developed and mature overseas. A few brands purchase domestic products. However, the head D2C brands such as SHEIN and PatPat usually choose to build their own stations in consideration of information security. If the website building tool itself is only a technical product, and the enterprise fails to establish a strong enough follow-up operation ecology for the brand, then the substitutability is extremely high.
Article | Chang Weiqian
Editor | Zhao Xiaochun
Figure ｜ Unsplash, 36 Krypton Sailing Map