Chinese pet food producer Gambol Pet Group has secured 500 million yuan ($70.58 million) in a Series B round of financing from Legend Capital, the venture capital arm of Chinese investment firm Legend Holdings, and Chinese commercial lender Industrial Bank.
The Series B round, which the company claims to be the largest round in China’s pet food industry in 2019, took the total capital raised by Gambol to 900 million yuan ($127.03 million), according to a statement on the WeChat official account of Taihe Capital, which served as the exclusive financial adviser for the deal.
“As ‘purchasing recreation for pets’ becomes an important consumption habit among young people, China’s pet food market is rapidly growing with the potential to become a hundred-trillion-yuan market in the future,” said Chen Rui, managing director of Legend Capital. “The investment will help Gambol to further expand the market, and to take a lead in setting the industry benchmark.”
The pet market in China reached 172.2 billion yuan ($24.28 billion) in 2018, more than three times the market size five years ago, according to a CNBData report. The report shows that China’s online pet product consumption, in particular, has stepped into a high-speed development phase with about 89 per cent pet owners having made online purchases of pet products in 2018.
Gambol, founded in 2006 and headquartered in eastern China’s Shandong province, operates as a pet food manufacturer and exporter in Asia with branches in Beijing, Thailand, Japan, the Netherlands, and the United States, booking over 1 billion yuan ($142.24 million) in annual turnover, according to its website.
Gambol provides a wide range of food products, such as dry food, wet food, real meat jerky treats, rawhide chew, and dental bone, among others, through its ‘Myfoodie’ brand on both online and offline retail channels in China and worldwide. The company also supplies pet food to customers including Walmart.
Proceeds of the new round will be used to finance the construction of new pet food production lines, research and development centres, intelligent storage centres, and facilities for pet competitions worldwide, said Qin Hua, founder and chairman of Gambol.
Global investment firm KKR poured 400 million yuan ($56.45 million) into Gambol’s Series A round in February 2017, which helped the firm expand production capacity in markets such as China, Thailand, the US, and countries in Europe.