Warburg tops up China investment to $200m

e-Shang has also secured a $120m pre-IPO loan from Goldman Sachs.

Warburg Pincus has committed a third round of funding to e-Shang, a Chinese warehouse services business, taking its total investment in the company to over $200 million, according to a company statement.

E-Shang was founded in 2011 by the global private equity firm and two entrepreneurs to cater to a growing demand for modern, high-quality warehouse services. The company also owns and develops logistics projects across Shanghai, Beijing, Guangzhou, and a number of other third-tier cities in China.

Simultaneously, the Warburg-backed company has secured a $120 million pre-IPO loan from global investment bank Goldman Sachs.

“We continue to see robust demand from customers for quality logistics facilities, driven by increasing domestic consumption and a shortage of warehousing supply. The new financing from Goldman Sachs and the recent equity commitment from Warburg Pincus provide e-Shang with a strong foundation for future growth as the company targets an IPO in the next few years,” Joseph Gagnon, managing director of Warburg Pincus, said in a statement.

Warburg declined to comment further, but a source with direct knowledge of the matter told Private Equity International the investment came from the firm’s global private equity fund, although it is unclear which global fund.

Warburg closed its eleventh global private equity vehicle on $11.2 billion in May after roughly 18 months in the market. The firm has traditionally focused its developing Asia strategy on China and India, but is now actively pursuing opportunities in Southeast Asia’s high-growth economies through the new fund as well, a source close to the firm revealed to PEI earlier.

It has yet to make a deal in the sub-region, but has been active in India this year.

In December, Warburg and Faering Capital together invested INR 30 billion (€36 million; $49 million) in ethnic apparel company BIBA Apparels, the largest-ever private equity investment in the ethnic-wear sector, according to a joint company statement.

The firm also sealed an exit to Kohlberg Kravis Roberts with portfolio company Alliance Tire in April this year. KKR bought a controlling stake in the business for a reported $500 million, which generated close to a 4x return for Warburg, an industry source told PEI in a previous interview.