Lao Shen Shi Jia raised millions to be China's next cheese leader — bankrupt in 3 years

Lao Shen Shi Jia (酪神世家) was founded in 2022 by Guo Benheng, a former general manager of Guangming Dairy, one of China's largest dairy companies. The startup aimed to capture the fast-growing Chinese cheese market with children's cheese sticks and other branded dairy products. In 2023, it raised a Pre-A round from Junlebao (君乐宝) and Jingpai Investment (劲牌投资), followed by a multi-million-dollar Pre-A+ round from Qingshan Capital (青山资本) in December 2023.

For several months in 2023, its cheese sticks were the top-selling cheese product on Tmall, and it ranked first in total GMV for cheese and dairy on Singles Day. However, the success was built on expensive e-commerce traffic acquisition — heavily subsidised sales, influencer promotions, and platform-level discounting that the unit economics could not support. The product was priced at 2–3 times the category average, and its complex 'five-dimensional growth' health concept was hard for consumers to remember.

Behind the revenue, the burn rate was unsustainable. The funding raised in 2023 was largely spent within a year on marketing and platform fees. By late 2023, the company was already seeking to liquidate inventory and attempted a pivot to B2B supply, but the new direction was never executed. Through 2024, the company went silent in the market. On September 8, 2025, the Shanghai No. 3 Intermediate People's Court accepted its voluntary bankruptcy liquidation application. The first creditors' meeting was held on October 23, 2025.

Lao Shen Shi Jia went from founding to bankruptcy in approximately three years. Its investors — Junlebao, Jingpai Investment, and Qingshan Capital — wrote off their entire investment as a total loss. The case illustrates how even an experienced industry founder with strong investor backing can fail when a startup's go-to-market strategy depends on subsidised traffic rather than sustainable product economics.