(Yicai) Sept. 26 -- ZhenFund-backed Flowerplus, a Chinese e-commerce platform that specializes in the sale and delivery of fresh flowers and related products, has paused operations due to a lack of funds, Yicai learned from a letter the firm sent to staff yesterday.

The company, also known as Huajia, is entering a period of suspension and rectification, it said in the letter. All employees, except those dealing with customers, will be put on leave from today and salary payments due later this month will not be paid on time, it added.

Shanghai-based Flowerplus was founded in 2015 as part of a broader online flower and gifting sector in China that has grown rapidly in recent years due to changing consumer preferences and higher e-commerce adoption.

Flowerplus caters to a wide range of occasions and events, including major holidays like Chinese New Year and Valentine's Day. It also provides floral arrangements for weddings, funerals, and corporate events. The company farms flowers on 1,330 hectares of land in southwestern Yunnan province, and some of its partners include Costa Coffee, Häagen-Dazs, and Adidas.

The firm has not had sufficient funds since last year, and the situation has become increasingly worse. In the past few months of off-season, Flowerplus has been unable to make ends meet due to low orders and bank loan repayments. Early this month its bank account was frozen, so all transfers to suppliers, customers, and employees have been blocked, the letter said.

Flowerplus has completed six rounds of financing in which it raised a total of CNY200 million (USD27.4 million). The last, a CNY35 million (USD3.8 million) Series B+ fundraiser, wrapped up in October 2019. Its investors include ZhenFund, Bright Venture Capital, Guanghe Venture Capital, and Envision Ventures.

Yicai previously reported that some consumers said that Flowerplus had adjusted its weekly delivery schedule to every other week, but others found that its mini-program, phone number, and Taobao channels are no longer available. No refunds have been forthcoming.

Employees also reported that salaries are overdue. In early September, a human resources staff member said the firm would pay June salaries in late September and the remainder would be arranged as soon as possible.

Editor: Emmi Laine