Ecommerce startup Wish is in talks with private equity firm General Atlantic and other investors to raise about $300 million in a new funding round, people familiar with matter said.
The fundraising, which hasn’t yet closed, values the San Francisco-based company at about $11 billion pre-money, higher than its previous valuation of $8.5 billion after the last funding round in late 2017, the people said.
Private equity firm General Atlantic and other investors are mulling investing $300 million into the bargain shopping app Wish at a valuation of $11 billion.
Wish executives didn’t respond to emailed requests for comment. General Atlantic didn’t respond to requests for comment.
Wish, an online marketplace founded in 2011, became a major competitor in the global ecommerce market by connecting Chinese merchants offering cheap goods with consumers in the U.S., Europe and other parts of the world, a model that has since been copied by other smaller apps.
Wish attracts customers with a deluge of inexpensive items, from $5 sneakers to $10 smartwatches to $15 faux leather jackets. It has about 90 million monthly active users and its revenue last year doubled to about $1.9 billion, according to Forbes, which published an article earlier this month based on an interview with Wish founder Peter Szulzewski. The Forbes article said the startup’s annual loss is about $190 million due to its heavy marketing spending.
The startup’s existing investors include DST Global, GGV Capital, Singapore’s state investment firm Temasek and Chinese online retail giant JD.com, among others.
The new funding round comes as Wish continues to face challenges from Amazon and Walmart as well as international competitors like Alibaba’s AliExpress, which also connects Chinese merchants with shoppers around the world. Amazon last year added a section called “Bargain Finds” where consumers can browse through cheap items that typically cost less than $10.
The Information last year reported, citing data from credit card transaction tracker Second Measure, that the vast majority of U.S. consumers who had bought something from Wish didn’t become regular users. Wish also has faced criticisms that some of the Chinese merchants using the marketplace are selling counterfeits and shoddy goods. But despite the struggles to retain its customers, Wish remains one of the most downloaded shopping apps in the U.S., according to App Annie.
Wish also has been growing in Europe. As of this week, Wish was the most downloaded shopping app in Italy, Finland, Norway, Denmark, Hungary, Slovenia and Bulgaria, according to App Annie.