Geely unit CaoCao promises to shake up China ride-hailing market after US$1.5b valuation
Company has more than 12,000 Geely electric cars in 17 cities, with more than 10 million users
CaoCao Car, a unit of Geely Auto and electric car ride-hailing app, has completed its first major funding round, at a valuation of more than 10 billion yuan (US$1.5 billion), the company said on Wednesday.
By raising 1 billion yuan from domestic and overseas investors in the Series A funding round, Hangzhou-based CaoCao signals a potential return of China’s ride-hailing price wars, as Geely – the country’s largest private carmaker – raises its stake in the hotly contested sector.
Tencent-backed Meituan-Dianping, China's largest on-demand services provider, recently showed its ambitions to expand into the sector, a move that could challenge Didi Chuxing, the world’s largest ride-hailing company.
“After the completion of the first funding round, the company will launch in Shenzhen and Chongqing in the short term,” said CaoCao. It currently has a fleet of more than 12,000 Geely electric cars in 17 Chinese cities, with the number of users exceeding 10 million, the company said. It also offers electric car rental services in some cities.
Geely Auto is the parent company of Swedish carmaker Volvo and Terrafugia, a United States-based flying car start-up. Terrafugia has said its vehicles will take to the skies by 2019.
“In the future, the company (CaoCao) plans to leverage Volvo’s driver-assistance system and autonomous vehicle technology, as well as Terrafugia’s flying car technology, to offer more diversified transport options for users.”
CaoCao, launched in 2015, received a licence last February to provide ride-hailing services with its electric cars, the first of its kind in China. Liu Jinliang, the company’s chairman, last year said it planned to build the country’s largest alternative energy vehicle fleet, including electric and hybrid cars.
The company said it had also made progress in connected cars, which allow better engagement between customers and vehicles through digital technologies. Its platform can build connections with cars and enable drivers to communicate with the company through mobile apps.
Separately, Meituan announced plans at the end of last month to launch its own car-hailing services in seven Chinese cities, including Beijing, Shanghai, Chengdu, Hangzhou and Xiamen.
The company, however, suffered a setback in Beijing, where it failed to launch its services last week as scheduled after local regulators said Meituan had not secured a licence. Meituan has said it is in the process of applying for the permit.
Mobike, a bike-sharing company, also said last month it would roll out a ride-sharing service in the southwestern Guizhou province.
Still, CaoCao said it's the country's only ride-hailing platform with a fleet of electric cars nationwide.
The Chinese government has accelerated efforts to advance the country’s capabilities in the electric car industry.
In September, it unveiled aggressive electric car policies, which will require all Chinese car manufacturers to obtain a new electric vehicle (NEV) score of at least 10 per cent from next year, and up to 12 per cent by 2020. The score is related to the production or import of electric vehicles.
The country’s ultimate target is electric and hybrid cars making up at least a fifth of its cars by 2025.