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author | yang yafei

editor | qiao qian

two years ago, at the beginning of the completion of series c financing, xu wei, the founder of ershe e-commerce platform hongbolin, hoped to invest this newly received investment of us$100 million in the "infrastructure work" of their platform, including service standardization, user experience, overall database construction, etc.

for a startup, $100 million is not a small amount of money, and it can be used to do a lot of things. at that time, xu wei told 36 krypton that she hoped to build hongblin into “the largest second-hand fashion transaction database in the chinese market” over a period of time.

but two years later, xu wei decided to quit and handed over the company to the second-hand e-commerce group zhuanzhuan. according to the official announcement at the beginning of this week, the two companies will be fully integrated. "after the integration is completed, xu wei will no longer serve as the company's ceo and will become a consultant for a period of time to assist the company in transitioning to a new strategy. the new ceo of hong bulin will be hu weikun, co-founder and coo of zhuanzhuan group, serves concurrently.”

zhuanzhuan group was the exclusive investor in series c financing at that time, but they were obviously not willing to just take a stake. “we have been talking about it since the end of last year, and we want to be a second luxury brand. hongbulin is better among online platforms and can complement each other in terms of business.” a person close to hongbulin’s old shareholder told 36 krypton. after the completion of this merger, hongblin will soon enter the "turnaround era."

but xu wei, the founder of hongblin, once hesitated whether to give up management rights. several consumer investors familiar with the deal told 36 krypton that the deal had been negotiated for a long time, due to both price issues and the founder’s unwillingness to give up control. but judging from the aforementioned announcement, the final result is obviously that zhuanzhuan has not relented in this regard.

a person in the second-hand luxury industry who has had contact with zhuanzhuan told 36 krypton that as early as 2021, zhuanzhuan began to look for second-hand luxury m&a targets in the market, and hongbulin is not the only project that zhuanzhuan has contacted. at that time, zhuanzhuan sought to gain control, rather than purely for financial investment purposes.

hongblin was founded by xu wei, yang bin and pang bo as the founding team in 2017. except for xu wei, the other founders have cashed out and left in 2023. also exiting were old shareholders such as matrix partners, xianfeng evergreen, idg capital, jiuhe venture capital, and sinovation ventures.

in the opinion of many investors, the sale of hongbulin to zhuanzhuan is not a bad outcome for both parties to the transaction.

“it’s good for platform companies to be integrated.” an industry insider in the primary market told 36 krypton. zhuanzhuan specializes in second-hand 3c digital products, while hongbulin specializes in second-hand luxury products. the two categories can complement each other. second-hand e-commerce is similar to first-hand e-commerce. vertical platforms have always lacked sufficient traffic like comprehensive platforms, so it is difficult to make profits. this is likely to be the case with hongblin.

more importantly, the current price of m&a targets is not expensive and "within a reasonable range."

an investor in consumer m&a told 36kr that under normal circumstances, the explanation of “reasonable price” is that the buyer considers the investment costs of old shareholders and gives a comprehensive valuation so that the buyer will not pay an excessive price. old shareholders and founders can also exit gracefully.

a major industry background for the completion of this merger and acquisition is that unlike the lively market of consumer investment and financing in 2021, consumer venture capital has cooled down in recent years, and mergers and acquisitions have become a new exit trend: previously, miniso acquired yonghui supermarket for 29.4 % equity and became the largest shareholder of the latter. in august this year, jiangnan buyi completed the acquisition of omg and its brand onmygame. earlier, kidswant acquired leyou, and anta acquired maia active. the story of the big fish eating the small fish has been repeated repeatedly.

the general decline in valuations brought about by the cooling of consumer investment and financing is an important factor in prompting buyers to take action. on the seller side, due to the failure of performance to achieve expected growth targets, many startups have triggered repurchase agreements, and investees have initiated equity repurchase lawsuits. finding a suitable selling partner is already a good way out.

but just as a suitable marriage can be found but not sought, m&a transactions that come into view usually come one after another, and it is difficult to truly appear on a large scale. the tacit truth in the industry is that there is no shortage of companies willing to sell, but there is a shortage of buyers with the strength and willingness.