China's O2O sector set to see more 'unicorpses'

Beijing

THE Beijing offices of Shequ001, a startup delivering supermarket goods booked via smartphone, stand almost deserted. Leaflets lie scattered on the floor.

Nearly 400 former employees, of a workforce that in March topped 2,000, have joined a social network clamouring to get their unpaid wages. Zhang, who gave only his family name, is one of fewer than three dozen workers left at a company that last year was worth two billion yuan (S$438 million). "We just wanted to build the market, so we burned through our money," he said, adding he hasn't seen the firm's chief executive since March.

In China's hottest tech sector, hundreds of "online to offline" (O2O) startups such as Shequ001, which draws mobile users to local physical stores and services, have failed as skyrocketing valuations deter investors and put the brakes on fresh funding. Many more are expected to…