Due to China’s Covid-19 limitations, Freshippo, a Chinese grocery store controlled by the Alibaba Group, aims to raise money at a lower valuation than anticipated of US $6 billion, down from US $10 billion, according to sources cited by Reuters.
During a two-month lockdown in Shanghai this year, people primarily relied on delivery services like those provided by Freshippo. However, businesses failed to keep up with demand because to supply chain breakdowns brought on the Covid-19 limitations in China. Sales for the company were negatively impacted by the shutdown in Shanghai, their largest market.
Investor faith in the grocery chain also declined as concerns grew about whether the loss-making business could continue to expand or become profitable soon in the face of stringent anti-Covid regulations.
According to the sources, Freshippo is trying to collect up to $500 million from outside investors, though the fundraising has not yet been confirmed. A source also said that Freshippo was not in a rush to seek money and still had a strong cash flow.
