We are all aware of the battle that went down between cab aggregator Uber and China’s leading ride-hailing service provider Didi Chuxing. Infusion of chunks of capital was involved and it all ended with Didi taking over Uber China, which made it the “leading” firm of this industry.
Looks like, the sole dominance of Didi will not last long, UCAR, a prominent ride-hailing firm has managed to score RMB 4.6 billion ($670 million) in the latest round of investment from four investors including UnionPay, China’s interbank network. The company has high-profile investors including Warburg Pincus and Jack Ma among its backers.
This is not it, UCAR’s board chairman Lu Zhengyao told the local media that there’s more to come, more funds will be added with total financing amounting to over RMB 7 billion (~ US$ 1.02 billion). The capital will be utilized for marketing, recruitment, offline outlets, and fleet procurement, he added. Also, the company had picked up RMB 10 billion through a private placement plan last year in October.
Listed on the Chinese over-the-counter (OTC) market, it was the first of its kind when listed in September last year and now has a valuation of RMB 40.93 billion.
UCAR differentiates itself from Didi on how it manages its business operations. Unlike Didi which works with private cars and crowd-sourced drivers, it boasts in-house fleet of vehicles and licensed drivers. This way, the drivers enables UCAR can to potentially hike up the margins and avoid government questioning about their legal status.
The firm currently offers four product lines, their Hong Kong-listed car rental arm Car. Inc, chauffered car service Shenzhou Zhuanche, a car loan service and an online car marketplace.
Lu also revealed that UCAR is ready to explore new fields as its different services are going to be profitable this year, this may lead them to add car manufacturing to the existing range of businesses.
There has been a rise in rivalry among the local companies but this along with the government constraints has not managed to discourage firms from entering the ride-hailing market space. LeEco-backed Yidao is also trying to bridge the gap arisen from Uber’s withdrawal. Even new players are being constantly witnessed invading the sector. China-based leading O2O titan Meituan has also added a car-hailing function into its app to complement the offered services ranging from food delivery to ticket booking.
