Taojiji
The business, the turning points, and the decisions behind them.
01 / WHAT IT BUILT
What the company did
Taojiji was a Shanghai-based online grocery marketplace founded in August 2018 by Zhang Zhengping, targeting consumers in China's small townships and rural areas. It lured users with cash incentives and deep subsidies, gathering 130 million registered users, and closed a $42 million Series A from investors including Tiger Fund and DST at a $242 million valuation.
02 / Taojiji FAILURE REASONS
Failure reasons
Taojiji burned cash at an unsustainable rate, subsidizing user growth to grab market share without a path to profitability, and began diverting merchants' sales proceeds to fund the strategy. After its $200 million Series B fundraising collapsed in September 2019, unpaid merchants stormed its offices and the founder admitted 'huge mistakes'. By late 2019 the company had accumulated losses of 1.2 billion yuan (about $170 million), and in December it announced it would file for bankruptcy.
03 / EVENT HISTORY
Events in the structured record
- Launched
Zhang Zhengping launches Taojiji in August 2018, an online grocery marketplace for township and rural consumers in China.
- Series A
Taojiji closes a $42 million Series A from Tiger Fund and DST, valuing the company at $242 million.
- Series B collapses
A $200 million Series B fundraising effort collapses in September; merchants owed sales proceeds crowd into the company's offices to demand payment.
- Debt crisis and bankruptcy
In October the founder admits serious cash strain and proposes a debt-to-equity swap to merchants; in December the company announces it will file for bankruptcy.
04 / CONTEMPORARY REBUILD ASSESSMENT
Difficulty of rebuilding this project today
Material for this section is being gathered and checked. It will appear here once ready.
Overall assessment: Not completed
05 / CAUSAL CHAIN
How the factors connect
- 01
Merchants were offered two options: convert their unpaid sales money into equity stakes in the company, or let it go through bankruptcy while the founding team tried to repay debts.
- 02
The founder warned that if merchants sued, the company's remaining cash would cover only about 1% of what it owed.
- 03
Under the debt-to-equity plan, merchant claims would convert to stakes with the founder holding them temporarily; new funding was promised to repay 20% of debts first.