(Yicai) Aug. 7 -- Shares in Missfresh almost quadrupled on the last day of trading last week after the struggling Chinese online grocery startup said that it has received USD27 million in fresh financing which it will use to transform itself into a digital marketing company.

Missfresh’s share price [NASDAQ:MF] surged 284.5 percent on Aug. 4 to close at USD1.98. But the firm is in danger of being delisted from the Nasdaq due to its low market capitalization and for failing to release its 2022 financial report on time. Missfresh can still request a hearing with the Nasdaq Hearing Panel to plead its case.

Two unnamed investors are buying 5.4 billion of Missfresh’s Class B ordinary shares, equivalent to 88.1 percent of its outstanding share capital, the Beijing-based company said on Aug. 3. Their voting rights will be delegated to Xu Zheng, the founder, chairman and chief executive of Missfresh, it added.

As part of the deal, Missfresh will acquire Mejoy Infinite, a Hong Kong-based digital marketing solutions provider, for USD12 million, to develop its digital marketing business.

Missfresh, which is backed by internet behemoth Tencent Holdings and US investment firm Tiger Global, has fallen on hard times amid stiff competition in the e-grocer sector. In July last year it shut down its primary on-demand grocery business and laid off many employees.

The loss of its main source of income caused revenue to plunge 60 percent last year from 2021 to CNY2.8 billion (USD400.4 million) while net losses narrowed 64 percent to CNY1.5 billion (USD220.9 million), according to its annual report released Aug. 4th.

The change in direction might not be enough to prevent Missfresh from being kicked off the Nasdaq, said Pan Helin, a researcher at Zhejiang University’s International Business School. The fallout from the failure of its on-demand retail business is still ongoing and competition in the digital marketing sector is fierce.

Editor: Kim Taylor