The successful IPO of online furnishings brand Ziel Home Technology signifies exceptional enterprises operating in overseas markets are likely to emerge successively and expedite integration into the financial market. The capital support is expected to propel the cross-border route into a phase of rapid growth in China, resulting in the emergence of prominent brands and multinational corporations that enjoy widespread popularity among international consumers.
On June 21, 2023, Ziel Home Furnishing Technology Co., Ltd (“Ziel Home Technology”) successfully listed on the A-share GEM Board of the Shenzhen Stock Exchange (SZSE) under the stock code SZ:301376. This marked the second cross-border enterprise invested by Vision Knight Capital to list with an A-share IPO, following Anker Innovations (SZ: 300866).
Ziel Home Technology effectively achieved a successful IPO offering of 40.15 million shares at an issue price of CNY 24.66 (USD 3.41) per share, generating total funds of CNY 990 million (USD 137 million). The money will be allocated towards the company’s primary business development such as the establishment of product R&D centers in Shenzhen and Dongguan, the expansion of overseas warehouses in the United States, Germany and the United Kingdom, and the construction and upgrading of the Zhengzhou headquarters operation and management center.
Founded in 2010, Ziel Home Technology specializes in the home and furniture sectors, utilizing detachable, flat panels for small and medium-sized products that fall under the category of fast-moving consumer goods (FMCG). The company has developed three major private brands, namely SONGMICS, VASAGLE, and FEANDREA, offering a product SKU of over 3,000. The company provides a comprehensive product portfolio for global consumers that cater to various living spaces such as the living room, bedroom, and patio.
In 2022, Ziel Home Technology achieved revenue of CNY 5.46 billion, with a compound annual growth rate (CAGR) of 36% from 2018 to 2022. In terms of main business segments, revenue generated from the furniture series amounted to CNY 2.59 billion, with a CAGR of 41%. The revenue generated from the home series amounted to CNY 1.87 billion, with a CAGR of 32%. The revenue generated from the patio was CNY 530 million, with a CAGR of 30%. The revenue generated from the pet series was CNY 380 million, with a CAGR of 33%.
Europe and North America are the two primary sales regions for Ziel Home Technology. In 2022, the company’s revenue in Europe reached CNY 3.07 billion, with a CAGR of 33% from 2018 to 2022, while the revenue in North America exceeded CNY 2.24 billion, with a CAGR of 39%.
According to the world’s leading provider of market and consumer data Statista, the global furniture and home furnishings market was approximately USD 1.3 trillion in 2021. Statista’s latest data released on 1 June this year shows that the global furniture market size is expected to reach USD 931.9 billion by 2027, a CAGR of 21.63%, indicating a large room for market growth and expansion.
Ziel Home set up a design and R&D center in Los Angeles, as well as logistics and distribution centers in Western Europe, North America, and Japan. Its products are sold in more than 50 countries and regions worldwide. In recent years, the company has received honors such as “Amazon All-Star Seller” and “Amazon’s Most Popular Brand Seller,” and has exhibited commendably in international markets. According to Marketplace’s statistics, the company ranks first in the furniture and home furnishings category on Amazon in Europe, and third in the United States.
In addition to the Amazon platform, Ziel Home Technology is developing its businesses on different online and offline channels. The company has already penetrated various sales channels, including Wayfair (the largest online furniture sales platform in the United States), Otto (one of Germany’s largest domestic online retail e-commerce platforms), and Target (the second-largest retailer in the United States).
Vision Knight Capital and IDG Capital provided multiple investment rounds, empowering and supporting the long-term development of Ziel Home Technology
Ziel Home Technology’s successful IPO could not have been achieved without the support of the relevant parties. Since 2019, Vision Knight Capital has demonstrated its commitment and support by taking two consecutive investment rounds. Vision Knight Capital has been supporting Ziel Home’s growth in various aspects, including monthly business analysis, the expansion of product lines, the construction of the industry ecosystem, the building of the talent system, and various nodes in the IPO process. Apart from Vision Knight Capital, IDG Capital has also been continuously supporting Ziel Home since its first investment in 2018.
Wei Zhe, Chairman and Founding Partner of Vision Knight Capital, said, “Ziel Home Technology is positioned as the ‘online IKEA’, adhering to long term and accelerating development in multiple categories, channels, and regions. The company focuses on providing global consumers with a one-stop online shopping platform that integrates trendy aesthetics, economic feasibility, and an unwavering commitment to superior standards. As a shareholder, Vision Knight Capital extends its felicitations to Ziel Home in a successful IPO. We hope that Ziel Home will continue to provide enhanced comfort to households worldwide and contribute to the creation of improved living spaces.”
Mr. Lian Meng, partner of IDG Capital, told EqualOcean, “IDG believes that Chinese furniture companies with global vision and localization landing capabilities will grow into global furniture brands in the future. With strong e-commerce operations and product development capabilities over the years, Ziel Home Technology has continued to strengthen its warehousing and logistics overseas and has seized the opportunity of the emergence of global furniture e-commerce. The pragmatic and steady style of Ziel Home instills optimism in us.”
Mr. Song Chuan, Chairman of Ziel Home Technology said, “Ziel Home has emerged as a highly recognized online home furnishing brand in Europe and America, and has practiced the transformation and upgrading from Chinese manufacturing to Chinese branding. The successful IPO is an important milestone in the history of our company’s development and marks the commencement of a new phase in our journey.”
About Vision Knight Capital
Founded by former Alibaba CEO Mr. David Wei in 2011, Vision Knight Capital is a private equity fund with over CNY 17 billion in assets under management in both USD and CNY. It focuses on investments in internet, new channel, consumer brands empowered by internet, and B2B platform/services/products empowered by internet sectors in China. To date, Vision Knight Capital has helped more than 30 portfolio companies grow into unicorns and even super unicorns, including Smoore International Holdings Ltd (HK: 06969), Anker Innovations (SZ: 300866), Pop Mart International Group Ltd (HK: 09992) and Guoquan Shihui in addition to Ziel Home Furnishings Technology.
Vision Knight Capital has long been focused on the cross-border e-commerce track. It is one of the few fund managers in the market with dedicated and professional investment teams focusing on cross-border e-commerce. Vision Knight Capital has supported the A-share IPOs of cross-border e-commerce companies such as Anker Innovations and Ziel Home Technology. It has also invested in outstanding cross-border e-commerce brand companies such as consumer-level new energy brand RENOGY, cross-border swimwear brand Cupshe, toy and festival supplies brand Joyin, and cross-border footwear brand Miracle Miles.
Vision Knight Capital believes that in light of China’s supply chain benefits and robust branding capabilities for international expansion, companies going overseas possessing favorable categories, brand potency, and formidable product development proficiencies will undoubtedly emerge as frontrunners in their respective domains. According to Mr. David Wei, “A wave of cross-border e-commerce brands from China’s capital market will soon expand overseas. This development is expected to occur in the near future.” See more at www.vkc-partners.com/index_en.php.
About IDG Capital
Since 1993, IDG Capital has been pioneering venture capital business in China. It has always focused on investing in Chinese technology-based companies and companies driven by technology and innovation, covering all the stages of startups, with investments ranging from millions of dollars to hundreds of millions of dollars.
IDG Capital has been strategically planning for international businesses for more than a decade and is dedicated to identifying Chinese companies that offer exceptional products and services on a global scale. Thus far, IDG Capital has successfully acquired notable enterprises within various industries, including SHEIN, Cider, patpat, Xiaomi, Ecovacs, Anker Innovations, insta360, Dreame, and Ziel Home Furnishings, encompassing international e-commerce, consumer electronics, and other sectors. See https://en.idgcapital.com/.
Founded in November 2018, EqualOcean is a business information platform and think tank that focuses on Chinese brands going global and on helping overseas investors or organizations to grasp China’s development opportunities. For clients from China, EqualOcean provides macro political and economic analysis, overseas market and industry research, brand international makeup photos, overseas resource building, among others. EqualOcean has both Chinese and English websites and is one of the very few organizations in China with the ability to write in-depth reports in English. EqualOcean’s global partners include Bloomberg, Refinitiv, SeekingAlpha, Nasdaq, ACN Newswire, SeaPRwire and other platforms. EqualOcean’s business analysts are frequently interviewed by the Wall Street Journal, New York Times, Financial Times, SCMP and other well-known media outlets. Visit https://equalocean.com to learn more.
Authors: Yiran Xing, Zhisheng Wang, Editor: Yiran Xing,(c) EqualOcean.