Freshippo is working with an adviser on an exclusive list of potential strategic and financial investors that will be invited to join the funding round, which is likely to kick off next month, the source said. Alibaba has yet to decide on the size of Freshippo’s planned fundraising, though it will retain a major stake in its new retail arm after the funding round.
Freshippo was established in Shanghai in 2015. At the end of last year, it had changed from a business group within Alibaba to an independent company the result of which is that it needs to be responsible for its own profits and losses.
In January this year, Hou Yi, CEO of Freshippo, sent an internal email saying that Freshippo had secured the combination of online and offline channels and is aiming to reach profitability in all of its stores.
As of December 18, 2021, the number of Freshippo stores nationwide exceeded more than 300. Up until now, Hema Fresh stores have opened in 27 cities across the country, and three Freshippo X member stores have been opened since the end of last year.
Freshippo has tried various business models before and failed. Among them, the company attempted to set up a front warehouse shop, a type of community bulk purchase service, but soon after ceased operations.