Sources familiar with the subject told Reuters' Kane Wu that Alibaba's Freshippo retail chain is aiming to raise capital at a valuation of approximately $6 billion, significantly less than the $10 billion valuation hoped for earlier this year.
Photo Insert: Freshippo has adjusted its goals for its first independent private funding round in response to a global decline in investor interest in unprofitable software startups.
As a result of China's COVID-19 restrictions, particularly a harsh lockdown in the economic heart of Shanghai, the company had to lower its valuation projections, they claimed.
Investors questioned whether Freshippo can continue to develop and earn a profit in the near future given the company's bleak outlook as the world's second-largest economy continues to follow a rigid strategy of eradicating COVID-19 cases.
According to sources, the Chinese grocery chain, known as Hema in Chinese, is seeking between $400 million and $500 million from foreign investors. They emphasized that the financing is far from being finalized and that the financial arrangements could alter.
According to another source, Freshippo would welcome suitable investors to aid in its expansion, but the company has a stable cash flow and is not under imminent pressure to obtain more capital.
Freshippo has adjusted its goals for its first independent private funding round in response to a global decline in investor interest in unprofitable software startups.
Swedish payments company Klarna Bank AB announced on Monday that it had secured $800 million at a valuation of $6.7 billion, down almost 85 percent from the $46 billion valuation it received last year.
Since last year, private fundraising in China has slowed due to a widespread regulatory crackdown in the tech, tutoring, gaming, and other industries.