It is rumored that PatPat, a children's clothing brand, is considering an IPO.

It is rumored that PatPat, a children's clothing brand, is considering an IPO. PatPat was established in Silicon Valley in the United States in 2014. The company is a DTC cross-border e-commerce company. Its products It is mainly suitable for infants and young children aged 0-12 years old. It is said that the children's clothing brand PatPat is considering an IPO. It is rumored that children’s clothing brand PatPat is considering an IPO1

According to people familiar with the matter, PatPat, a maternal and child clothing website, is considering an initial public offering (IPO).

People familiar with the matter, who asked not to be named because the information is not public, said the company, which has received investment from SoftBank Vision Fund Phase 2, has held preliminary discussions with potential advisers. They said a stock offering could take place as early as this year and could raise about $500 million. Two of them said PatPat could be valued at around $3 billion.

Informed sources said that Interfocus Inc. The company, which does business under the name, is considering listing venues including Hong Kong. It may also choose to list in the United States, a person familiar with the matter said.

Negotiations are still ongoing and details such as the size, location and timing of the issuance may change, people familiar with the matter said. PatPat did not immediately respond to a request for comment.

PatPat was founded in 2014, with children's clothing (0-14 years old) as its main business, and is committed to building a global brand for maternal and infant family consumption scenarios. Data from "QiChacha" shows that PatPat has raised 7 rounds of financing since 2014 and has received a total of more than 800 million US dollars in financing. Investors include SoftBank Group, DST Global, SIG Haina Asia, Sequoia Capital and other investment institutions.

As the leader of DTC maternal and infant e-commerce overseas brands, PatPat has entered its 8th year overseas. As an early and mature DTC overseas brand, it has now gained 10 million fans on social media platforms. , while this figure was 6 million in the case we wrote in August last year.

PatPat’s social media data continues to grow, and the growth rate is also very fast, but as the size of its social media homepage and operating strategies change, the measurement of its social media influence will also appear. Certain changes.

The overall influence of the PatPat brand is still very strong, but with the increase in social media operations and marketing on its market segment homepages (such as France, Spain, etc.), each individual market segment homepage is more like It is an independent brand. On the one hand, the joint effect is not obvious. On the other hand, the refined operation of regional homepages has also had a diversionary impact on the growth of global social media data. It is rumored that children's clothing brand PatPat is considering IPO2

Following Shein, another cross-border e-commerce unicorn was revealed by the media to be listed.

According to reports in the financial industry, super unicorn PatPat is considering an initial public offering (IPO). The stock issuance may occur as early as this year, may raise approximately US$500 million, and may be valued at around US$3 billion. , adding that the company is considering listing locations including Hong Kong and may also choose to list in the United States.

As negotiations are still ongoing, people familiar with the matter said that details such as the size, location and time of PatPat’s issuance may change. PatPat did not immediately respond to a request for comment on this listing rumor.

With a valuation of US$3 billion, how did PatPat develop?

Three men from science and engineering create children’s clothing brand unicorns

PatPat was established in Silicon Valley in the United States in 2014. The American company is Interfocus Inc. and the Chinese company is Shenzhen Yingfus Technology Co., Ltd. and Hangzhou Yingfus Technology Co., Ltd.

The company is a DTC cross-border e-commerce company. Its products are mainly suitable for infants and young children aged 0-12 years old, and its user base exceeds 20 million.

The three founders of PatPat all graduated from Carnegie Mellon University, and one of them, Wang Can, has a nascent entrepreneurial experience of selling domestic cartoons abroad.

Although it sounds a bit unbelievable that a top student who graduated from college and was the chief engineer of Oracle would sell cartoons, but Wang Can made his first business a success. According to Moby Dick's information, he sold more than 150 cartoons at that time, each of which had overseas distribution rights, and the total sales per year were more than 10 million yuan.

What Wang Can does well is that he has established a two-tier translation system, which makes the details of domestic films reflect European and American styles and makes them look like international brands. It was this accumulation that gave Wang Can a good understanding of how to build a brand, and also allowed three men who studied computers and had no experience in making clothing to successfully establish PatPat, a B2C export maternal and infant e-commerce platform.

According to Qichacha, as of August 2021, PatPat has had several rounds of financing, of which the D round completed US$510 million in financing, setting a new record as the largest disclosed in the domestic cross-border e-commerce industry at that time. Single financing record. Subsequently, in the D round, SoftBank Vision, founded by Masayoshi Son, an internationally renowned investor and a benchmark in the VC/PE circle, exclusively invested US$160 million.

In addition, PatPat’s investors also include Sequoia Capital, IDG Capital, General Atlantic Investment, etc., which can be said to be the darling of capital.

PatPat has not only been recognized by the market, but also loved by the public. It has been recommended many times on the homepage of Apple's iTune Store in North America. And according to official account cross-border hunting technology data, PatPat has a considerable number of fans on social platforms such as Facebook, Instagram, TikTok, and Youtube. Among them, the number of likes and fans of the Facebook main account has exceeded 6 million.

On the cross-border e-commerce track, why can PatPat seize some markets in the field of children's clothing?

How does PatPat go overseas?

In recent years, the domestic market has gradually become saturated and industry competition has intensified. According to data disclosed by the agency, in the e-commerce retail platform market, the top five market shares are Taobao (51), JD.com (20), Pinduoduo (15), Douyin E-commerce (5) and Kuaishou E-commerce (4), leaving less than 5% of the market share shared by other platforms.

Under this trend, going overseas has become a good opportunity for many e-commerce companies. In addition, the epidemic has accelerated the development of online retail platforms, providing a broad space for platforms such as PatPat. .

Moreover, judging from the information on Zhihu Alayu, the North American market for PatPat is one of the markets with the largest demand for infant and child clothing at this stage. Data show that in 2021, the sales revenue of infant clothing in the North American market accounted for 17% of the global baby clothing market, reaching a scale of nearly 7.1 billion US dollars.

At the same time, the DTC model adopted by PatPat has certain operational advantages.

First of all, the traditional export model adopts the factory-exporter-brand-distributor-retailer-user model. There are financial costs and time costs, and profits are easily lost to exporters, etc. Swallow. The DTC model opens up the intermediate links and allows products to be delivered directly from the factory to users. This saves most expenses, thereby reducing costs and allowing PatPat to set low prices for products.

Secondly, the DTC model relies on private domain traffic, which can directly reach users. This can analyze user needs in real time, improve competitiveness, and reduce customer acquisition costs. Moreover, infants and young children grow very fast, which makes maternal and infant products itself an industry with a relatively high repurchase rate.

As mentioned in the preface, Wang Can has experience in building brands.

He established a five-person copywriting team for PatPat, two of whom are American employees, responsible for polishing the Chinese-English translation. He also hired professional designers and photographers locally to enhance the style of the products. In order to better adapt to the US market, PatPat has also established a local team to better understand the habits and culture of users.

This makes PatPat's products look more European and American-style, which is helpful for brand building and will also make consumers feel that they are more cost-effective.

In addition, since 2016, PatPat has set up offices in Shenzhen, Guangzhou and other places. In terms of logistics, PatPat has created its own overseas warehouses in Europe and the United States, controlling the logistics transportation time to 4-10 days. Its founder also said that he will eventually build his own logistics.

It should also be noted that PatPat established its own website by building an independent website, so last year’s Amazon “account ban wave” did not affect the brand, but cross-border sales were huge. "Youkeshu" has 340 blocked sites and 130 million yuan in frozen funds. According to statistics from the Shenzhen Cross-Border E-Commerce Association, industry losses are estimated to exceed 100 billion yuan.

From the above aspects, it is not difficult to understand that PatPat can gain the favor of capital and users.

However, as a DTC cross-border e-commerce company, PatPat may be affected by policies. Moreover, Amazon is at the forefront of cross-border e-commerce, and its popularity and market rate are very high. According to data from Statista in 2020, Amazon is the preferred cross-border e-commerce platform for 26% of global consumers.

However, PatPat’s market is too vertical. Compared with giants like Amazon, it is certainly not large enough. Therefore, it may not be easy for the brand to seize more market share in the future.

At the same time, although PatPat has received many positive reviews, there are also some low scores. A user who rated it three points on the Apple App Store left a message saying that PatPat is not easy to cancel orders, which shows that the brand The app also has areas for improvement. A mother also wrote in a shopping review on Shaishihuan that PatPat's clothes are generally good, but there are also some small flaws, such as small clothing labels that are a little difficult to remove and several small threads in the seams.

Even if these issues seem innocuous, quality issues can still affect the brand's image and, over time, harm the brand's interests.

Gong Ting, managing director and executive partner of SIGHEINA Asia, once said that he is firmly optimistic about the market opportunities of China's supply chain overseas and cross-border DTC, and looks forward to PatPat's continued efforts to become the world's leading children's clothing brand. . GGV Capital has also said that PatPat is a team that it sees as pursuing excellence in all aspects, and believes that it can become the world's leading DTC brand in the future.

Although PatPat is not perfect, it is likely to gain more development opportunities after it is launched in the future and is favored by the market. As Munger said, there is a mistake in doing nothing. Therefore, maintaining the existing advantages, continuing to move forward, and correcting the flaws may be what PatPat needs to do before and after the listing. It is rumored that PatPat, a children's clothing brand, is considering an IPO3

According to foreign media reports, PatPat, a cross-border e-commerce and the world's largest children's clothing DTC brand, is reported to be considering an IPO, and its valuation may be around US$3 billion.

A person familiar with the matter said that PatPat has conducted preliminary discussions with potential investment banks. They said the IPO could be completed as soon as this year and is expected to raise about $500 million.

People familiar with the matter said that PatPat is considering listing locations including Hong Kong. It may also choose to list in the United States, a person familiar with the matter said.

PatPat, founded in Silicon Valley in the United States in 2014, is the world's largest and fastest growing children's clothing DTC brand, with users covering more than 100 countries and regions around the world. In the list of the top 100 overseas social platforms of Chinese overseas brands in Q4 2020, PatPat ranked Top 1 in the e-commerce category and Top 9 in the overall list. It is a big V account with 6 million fans on Facebook.

PatPat was established in 2014 in Mountain View, Silicon Valley, California, by Wang Can (CEO) and Gao Can (COO). The two founders have been classmates and colleagues for many years. They both graduated from Carnegie Mellon University and also served as chief engineers at Oracle in the United States. When Gao Can's wife was pregnant with their first child, he discovered that the children's clothing industry was seriously lacking in fashion and practicality, so they worked together to create a platform for mothers to find rich opportunities for themselves and their families without spending a lot of time and money. Shopping platform for maternal and infant products.

PatPat has experienced several rounds of financing. Its investors include: SoftBank, SIG Haina Asia, Fengrui Capital, Sequoia Capital, CDH Baifu, Capital Today, General Atlantic Capital, CDH Baifu Fu, Ocean Link, DST Capital, DST Global led the investment, GGV Capital, etc.