SMC Capital China (“SMC3”) announced today that portfolio company Momoyoyo (www.momoyoyo.com, “Moyo”, Chinese name “魔友”), China’s largest pet supplies retailer, closed its Series B financing with lead investor Sumitomo Corporation Equity Asia Limited (“Sumitomo”) and co-investors Capvent Asia (“Capvent”) and SMC3. The company will use this round of financing to accelerate national expansion and improve customer service.
“Sumitomo is bullish about ecommerce’s rapid development in the Greater China region, particularly in the pet sector,” said Terence Li, Vice President of Sumitomo. “The Sumitomo group owns some of the largest international brands in the pet industry. We will actively bring Moyo to partner with these brands and to jointly develop the Chinese market. During our due diligence, we found Moyo to be highly capital efficient. Despite being a younger player with less than half the capital invested versus peers, Moyo has emerged as the clear pet supplies retailer market leader - on or offline - with at least twice the market share and above industry margins.”
Xinhuanet news reported[1] in April 2012 that China’s pet supplies market currently contributes only 0.4% of the country’s GDP; the pets market penetration is five times higher in Japan (2% of GDP), at least ten higher in Europe (4%-5%) and 15 times higher in North America (6%). The Hong Kong Pet Trade Association estimated that China currently has about 27 million pet dogs and 11 million pet cats with the total pet supplies market size worth about RMB100 billion[2].
SMC3 partner San Eng, commented, “As Moyo’s Series A investor, we have been involved in Moyo’s development in past three years and we are excited about Sumitomo and Capvent’s investments because of their strong value add to the company. Sumitomo brings strategic value to Moyo and Capvent is a reputable international private equity firm who is both a direct investor and a fund-of-funds.”
Moyo is China’s largest pet supplies retailer - on or offline. Focused on quality service and customer services, it markets 4,000+ popular pet products via its catalog and online store (www.momoyoyo.com) at competitive prices to pet lovers nationwide. It aims to be the most trusted provider for China’s pet lovers.
About Sumitomo Corporation Equity Asia Limited (“Sumitomo”)
Sumitomo is the Asian private equity arm of Sumitomo Corporation. It seeks investment opportunities in the Greater China and the South-East Asian region in all emerging sectors such as high-tech, consumer-related, renewable and clean technology. Sumitomo’s investment team works closely with each of their investee companies, providing valuable advice and their global business network to help these companies achieve business value and growth, and derive all possible synergies between them. www.scequity.com.hk
About Capvent Asia (“Capvent”)
Capvent is a private equity firm founded in 2000, who is both a direct investor and a fund-of-funds with extensive access to general partners, consumer brands and distribution channels. It is headquartered in Zurich, Switzerland, with another 5 offices throughout Asia, making it one of the early institutional investors in emerging Asia. Private equity managers appreciate the vast experience, discipline and transparency that Capvent introduces into their investment process, while portfolio companies look to Capvent for the unique networks and connections it brings, to help them increase market share, develop international best practices and its growth strategy. www.capvent.com
About SMC Capital China (“SMC3”)
SMC3 is part of Hong Kong based Simon Murray Group, established in 1997 by Mr. Simon Murray, the former CEO of Hutchison Whampoa and Executive Chairman of Deutsche Bank Asia. SMC3 is a leading China-focused growth capital private equity firm. It is a long-term activist investor bringing financial expertise, deep industry domain knowledge, and marketing and operations experience to benefit portfolio firms such as Moyo. SMC3 focuses on the consumer, technology, advanced manufacturing and greentech sectors. www.smc-capital.com
[1] Full news article can be found here http://news.xinhuanet.com/fortune/2012-04/22/c_111822719.htm
[2] Hong Kong Pet Trade Association estimates pet food market alone is RMB 40 billion, accounting for about 40% of pet-related spending; pet medications contribute 16% of spending, toys contribute 13%, snacks, accessories and pet care products make up the remainder.