Jushuitan (聚水潭) Updates IPO Prospectus: China’s Largest E-commerce SaaS ERP Provider, with Revenue Approaching US$100 Million in 2023

JST Group Corporation Limited (“Jushuitan” or the “company”), a portfolio company of Blue Lake Capital, has updated its IPO prospectus on March 21, 2024, as it progresses with its listing process on the Main Board of the Hong Kong Stock Exchange. CICC and J.P. Morgan are acting as the joint sponsors.

Established in 2014, Jushuitan has developed a comprehensive set of cloud-based e-commerce SaaS products, enabling businesses to seamlessly upgrade capabilities, improve performance, grow their cross-platform operations, and reduce deployment and operational costs. 

Jushuitan is China’s largest e-commerce SaaS ERP provider in terms of relevant revenue in 2023, with a market share increasing from 20.7% in 2022 to 23.2%, according to CIC. In China’s e-commerce operation SaaS market, the company also ranks first based on the total SaaS revenue in 2023. 

Specifically, Jushuitan ERP is the company’s cornerstone SaaS product, which serves and fulfills the critical needs of merchant customers in handling e-commerce order-related operations on e-commerce platforms. Merchants can integrate, synchronize, and coordinate all their stores, orders, products, inventory, and other operating or financial data across multiple platforms through Jushuitan ERP, enjoying a streamlined cross-platform business experience. Currently, the Jushuitan ERP offers key functionalities such as Order Management System (OMS), Warehousing Management System (WMS), Procurement Management System (PMS) and Distribution Management System (DMS), among others. According to the report by CIC, Jushuitan ERP has emerged as the most popular e-commerce SaaS ERP brand among Chinese merchants.

In 2023, Jushuitan ERP well managed the processing of approximately 65 million orders per day, with a peak daily order volume reaching 233 million, being acknowledged as an e-commerce SaaS ERP with the highest order processing efficiency in China. According to CIC, Jushuitan ERP is also one of the fastest iterating e-commerce SaaS ERP products in China in terms of the number of iterations. From 2021 to 2023, Jushuitan ERP maintained an average response time of less than 50 milliseconds and an uptime of more than 99.5%. 

Building upon its ERP foundation, Jushuitan has further expanded product and service offerings to encompass other e-commerce operation SaaS products. As of December 31, 2023, the company has introduced four additional e-commerce operation SaaS products (excluding ERP). Jushuitan’s suite of SaaS tools caters to diverse needs of e-commerce participants, providing capabilities such as financial accounting, management reporting and analytics, workflow management, and wholesale market procurement.

In 2023, Jushuitan served 62,200 SaaS customers across various categories, as compared to an industry average of less than 20,000 customers in 2023.

Jushuitan has demonstrated notable performance in two sets of data that reflect the excellence of a SaaS company. From 2021 to 2023, Jushuitan achieved an LTV/CAC ratio over 6x. This ratio measures the relationship between customer lifetime value and customer acquisition cost, with the industry average being approximately 3x. Meanwhile, Jushuitan‘s net dollar retention rate in 2023 stood at 114%.

Furthermore, in the years 2021 to 2023, customers who purchased two or more Jushuitan products contributed 27.6%, 30.6% and 33.0% respectively of its total SaaS revenue for each respective year. 

In terms of financial data, Jushuitan‘s revenue for the years 2021, 2022, and 2023 were RMB433 million, RMB523 million, and RMB697 million, respectively, with a compound annual growth rate of 26.8%. During the same period, the company’s gross profit margins were 50.5%, 52.3%, and 62.3%, showing a year-on-year increasing trend. 

Notably, Jushuitan‘s revenue in 2023 exhibited a higher year-on-year growth rate compared to 2022, accompanied by a significant increase of 10 percentage points in gross profit margin. The improvement in gross profit margin is attributed primarily to economies of scale and an increasing proportion of recurring customers. Additionally, Jushuitan‘s adjusted net losses narrowed by 45.8% year-on-year, and the adjusted net loss rate decreased sharply from 72.4% in 2022 to 29.4%. 

In this regard, Jushuitan has the potential to soon become a Chinese SaaS company with annual revenue surpassing US$100 million and positive adjusted net profit. In the U.S. SaaS industry, reaching US$100 million in revenue is often seen as a threshold for scale. 

As of December 31, 2023, Jushuitan held cash and cash equivalents amounting to RMB897 million, more than doubling from RMB427 million as of December 31, 2022. In 2023, Jushuitan generated net cash inflow from operating activities of RMB210 million, representing a year-on-year growth of 165.8%. 

Since its establishment, Jushuitan has received investments from renowned institutions such as Ameba Capital, Welight Capital, Vision Plus Capital, Blue Lake Capital, HongShan, Goldman Sachs, and CICC Capital.