Handbag E-Tailer Mbaobao Puts Fourth Round Funding in Its Purse

The specialist Chinese e-commerce site Mbaobao.com, which sells only women’s handbags, has wrapped up a fourth round of funding, according to its CEO Ye Haifeng. The circumstances around this news coming out are rather odd, however – the confirmation from Mr. Ye was in response to rumors that one of its major backers, DCM, had refused to take part in further financing. But the CEO insists that DCM and a number of familiar investors are still on board. But no further details about this fourth round have been made public, except that it was finalized in February.

The CEO’s retort to the rumors came on his official Sina Weibo account – see the tweet here – where he also tackled the insinuation that the site was struggling. “Gross profit is up and costs are down,” he added.

A few hours after this kerfuffle, the accountants China Renaissance confirmed the D-round funding on its own Weibo page, but the investment amount is still hushed up.

Mbaobao – one of numerous specialist e-commerce sites in China that rely on customer loyalty in a niche area – completed its first ever major funding round in September 2010, which amounted to US$30 million and was led by DCM. When we chatted with DCM’s Hurst Lin last winter, he told us that lady’s bags are one of the best items to sell via the internet: because the bags don’t have sizes, and are often replaced annually. DCM also backs a lot of other niche Chinese e-tailers, such as VIPShop, which recently floated on the NYSE.

We’ll update if we get an official list of investors in this round.