November 08, 2010 at 00:00 AM EST
Vipshop Raises $20 Million in Series A Funding

Vipshop, the leading online ‘flash sales’ retailer in China, today announced that it has closed a $20 million round of funding from global VC firms DCM and Sequoia Capital. Vipshop focuses on online 'flash sales’, offering premier brand name clothing, accessories, cosmetics and designer household items at discounted prices in a limited time sales format. With over 1.5 million members across China, Vipshop sells popular foreign and domestic brands directly to the fast growing middle-class in China. This new round of funding will be used towards expanding corporate and marketing initiatives and investing in operation infrastructure.

Vipshop currently works with over 400 retail brands and distributors including Adidas, Esprit, Nine West, Kappa, Ochirly, GEOX and Triumph. The company provides a unique opportunity for brand partners to reach China’s increasingly affluent middle-class and serve as a distribution channel for out of season stock, in which there typically is no shelf space in Chinese stores. Given China’s unique marketplace, there is additionally an important need for brands and distributors to work with credible online retail channels to reach their target audience. Vipshop is addressing this already, and Vipshop partners in return gain valuable insight into Chinese consumer behavior to help grow brand awareness and customer loyalty.

“Vipshop has established itself as a credible online retailer with some of the largest global brand distributors, and we are taking the Chinese ecommerce market in a new direction,” said Vipshop Co-founder and CEO, Arthur Hong. “With Vipshop, the growing Chinese middle-class can confidently purchase top of the line goods at a reasonable price, and retail brands are assured their products are sold through a safe and secure online channel. The funding from DCM and Sequoia, two of the industry’s leading investment firms, will provide us with the capital and global expertise to further accelerate our growth.”

“Vipshop is the largest online flash sales retailer in China. Its revenue, membership and brands are far ahead of its peers, and this is a strong validation of their business model,” said DCM General Partner, Hurst Lin. “For the 120 million middle class in China, who have a new appetite for chic Western brands at an affordable price point, Vipshop is a natural choice, especially for global brands looking to take advantage of this market opportunity in China.”

“Ecommerce in China is growing at an explosive rate and is catching up with more mature markets such as those in the U.S.,” said Sequoia Capital China Founding Managing Partner, Neil Shen. “Because of Vipshop’s market leadership in online flash-sales and experienced talent already residing in-house, we see a huge and exciting opportunity to build a great company.”

About Vipshop

Founded in 2008, Vipshop is a leading online “flash sales” retailer in China, offering international and domestic designer goods at discounted prices in a limited time sale format. Vipshop offers both high-end and middle-end popular brands to the fast growing middle class. The company works with over 400 brands, including leading Western and domestic distributors of brands such as Adidas, Esprit, Nine West, Kappa, Ochirly, GEOX and Triumph. Vipshop provides an easy and secure way for designer brands to distribute and meet the demands of middle-class Chinese shoppers. For more information, please visit: http://www.vipshop.com/.

About DCM

DCM is an early stage venture capital firm that has been helping entrepreneurs build world-class technology companies since 1996. The firm’s partners manage five funds totaling US$2 billion, and have made investments in more than 120 technology companies across the United States and Asia. With offices in Silicon Valley, Beijing and Tokyo, DCM provides hands-on operational guidance and a vast network of business and financial resources to its portfolio companies globally. DCM’s portfolio-company investments have resulted in a large number of successful exits including 18 IPOs on seven major exchanges, and 14 acquisitions since inception. Recent successes include Neutral Tandem, a startup funded by DCM in 2004 that traded at a market cap of over $1B on the NASDAQ in 2009, and VanceInfo, recently ranked the number one performing stock by Investor’s Business Daily.

DCM’s notable Asian investments include: 51job (Nasdaq:JOBS) (online HR service provider), 99bill.com (China’s leading e-commerce payment platform), BitAuto.com (China’s leading Auto Media Group), All About (Jasdaq:2454), Dangdang.com (China’s No.1 online book and merchandise seller), Hudong.com (China’s largest wiki platform provider), JCI (Nasdaq Japan - Hercules: 9424) (mobile data and wireless voice communications service provider), Kabu.com (TSE Main:8703) (leading online brokerage firm in Japan), MbaoMbao (online retailer in China), Oak Pacific Interactive (OPI) (China’s leading conglomerate of community websites including RenRen, the number one social networking site in China), Pandora.TV (Korea’s leading Internet video site), Tonchidot (Japan’s leading augmented reality application), and PapayaMobile.

About Sequoia Capital

Sequoia Capital is a venture capital firm specializing in seed stage, early stage, and growth stage investments. The firm invests in all sectors with a focus on consumer, energy, financial services, healthcare services, internet, mobile, outsourcing and technology. Sequoia Capital was founded in 1972 and has offices in China, India, Israel and the U.S. As the "Entrepreneurs Behind the Entrepreneurs", Sequoia Capital's Partners have worked with innovative entrepreneurs such as those at Apple Computer, Oracle, Cisco Systems, Network Appliance, Yahoo!, Google and YouTube.

Sequoia Capital China started in 2005 and has made investments in more than seventy fast-growing companies across various industries. Sequoia Capital China brings local knowledge and networks as well as global expertise and resources to help China’s entrepreneurs build successful companies. Notable companies backed by Sequoia Capital China include: VanceInfo Technology (NYSE:VIT), Renhe Commercial Holding (1387.HK), PEAK Sport (1968.HK), NuoKang Bio-Pharmaceutical (Nasdaq:NKBP), AutoNavi (Nasdaq:AMAP), Changelight (300102.SZ), Country Style Cooking (NYSE:CCSC), Mecox Lane (Nasdaq:MCOX), Le Gaga (Nasdaq:GAGA), Sparkle Roll (0970.HK),Tainyi Fruit (0756.HK) and SINA.COM (Nasdaq:SINA).

To learn more about Sequoia Capital visit www.sequoiacap.com.

Contacts:

Sparkpr
Karen To, 415-321-1890
Karen@sparkpr.com
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