(Yicai) May 27 -- Zhufaner, a once high-flying Chinese home renovation startup, is said to be grappling with a cash-flow crisis that has brought work on multiple of its projects in Beijing and Shanghai to a standstill.

Several homeowners in China’s capital and the east coat metropolis of Shanghai have reported the suspension of projects managed by Zhufaner, while some clients said on social media that they had taken out bank loans to fund the renovations and now face the risk of unfinished work and repaying the lender.

Yicai dispatched a reporter to Zhufaner’s home-lifestyle showroom in Shanghai yesterday and found that most employees were absent, with only a skeleton crew working rotating shifts to greet walk-in customers.

One staffer confirmed that the Beijing-based company has a cash-flow problem. Another said the local business’s capital chain was temporarily a problem because head office was diverting funds to plug holes in the firm’s group-buying business. Several staffers told Yicai that Zhufaner is seeking new financing or a potential merger to resolve the crisis.

As of press time, Zhufaner had issued no official statement on the matter.

Founded in 2015 as a registered company named Beijing Shuimu Youpin Technology, Zhufaner has raised funds in multiple financing rounds from investors such as Innovation Works, Tisiwi, China Growth Capital, and Jiacheng Capital.

Between 2018 and 2021, the firm’s revenue soared from CNY100 million to CNY640 million (USD13.9 million to USD89 million). At the opening ceremony of a Super Home Mall, Zhufaner co-founder Liu Xianran once set the goal of achieving “100 stores earning CNY100 billion (USD13.9 billion) from 2030 to 2035.”

Beijing Shuimu Youpin Technology had CNY1 million of its equity frozen under property-preservation orders by a court in Foshan, Guangdong province on April 28, according to data from corporate information site Qichacha.

Editor: Tom Litting