CHINA’S Dingdong Maicai has raised US$300 million in a new funding round that values it at US$2 billion, two people familiar with the matter said, as the online grocer benefits from a rise in demand for fresh food delivery amid coronavirus-related restrictions.

The fundraising was led by U.S. private equity firm General Atlantic, the people said on condition of anonymity as the information is not public. The deal was finalized about half a month ago, one of them added.

Shanghai-based Dingdong, whose earlier backers include Sequoia China and Qiming Ventures, did not respond to an emailed request for comment. General Atlantic’s Hong Kong office did not comment over phone while an email sent to its U.S. office was not answered outside business hours.

Dingdong’s focus on delivering fresh food to users’ doorstep puts it among the few sectors, such as health care and online learning, that have seen a surge in investor interest due to a pick-up in demand as curbs confine people to their homes.

Operating mainly in first-tier cities like Shanghai, Beijing, Shenzhen and Hangzhou, Dingdong saw a 14 percent rise in monthly active users in January, when travel restrictions were imposed, from December levels, market researcher Analysys says.

“The outbreak has broadened the user base for online grocery companies,” said Zhao Yue, an Analysys analyst.

“Only young people ordered fresh food online before the outbreak, but now more middle-aged consumers are buying fresh groceries online,” Zhao said, but added the sharp rise in demand was flattening with China gradually opening up for business.

Dingdong Maicai, which means “Dingdong Buy Vegetables,” has said its revenue topped 1.2 billion yuan (US$169 million) in February. It processed around 300,000 orders daily during the outbreak in Shanghai, the Chinese news portal Paper reported.

This comes after the grocer faced operational setbacks last year and, according to Chinese magazine Caijing, paused expansion in some cities including Shaoxing and Wuxi. (SD-Agencies)