‘Uber for trucks’ is latest Chinese unicorn with Baidu-led US$156 million funding

Latest capital injection follows US$115m December fundraising, which crowned Huochebang (Truck Alliance) a ‘Unicorn – a private firm valued at US$1b or more

PUBLISHED : Tuesday, 02 May, 2017, 6:05pm
UPDATED : Saturday, 31 March, 2018, 11:52am

An offshoot of Baidu, China’s dominant online search engine operator, has led a US$156 million funding round into the country’s leading online trucking platform, as it ramps up its effort to use artificial intelligence to reshape the booming transportation industry.

Truck Alliance, an ‘Uber-type’ service to book trucks, known locally as “Huochebang (貨車幫)”, said on Tuesday it had completed a new round of financing led by Baidu Capital, the firm’s investment arm which focusses on mid- and late-stage deals in the internet sector.

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Huochebang was founded in 2014 in southwest China’s Guizhou province and is also backed by Hong Kong-listed Tencent Holdings and private equity firm All-Stars Investment.

It operates by matching vehicles nationally with commodity producers in need of transport.

It also provides follow-up services, including helping find parking lots, and sells GPS and ETC (Electronic Toll Collection) devices for highway transportation, as well as making money from the sale of toll cards and commissions on the card top-ups, as well as helping truckers with financing.

The latest capital injection follows a US$115 million fundraising in December, which crowned Huochebang as a “Unicorn”, private companies valued at US$1 billion or more.

According to mainland media, some 200 major companies are competing in China’s trillion yuan logistics industry, with most betting big on internet-enabled truck-cargo matching platforms.

But Huochebang is considered “the largest and the only nationwide platform in China”, said Wu Wenjie, managing partner of Baidu Capital, in a statement.

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Dai Wenjian, Huochebang’s founder, told a Beijing forum last month the company has connected some 2.6 million trucks with around 400,000 logistic companies in China, and is set to deliver a profit in 2017.

The latest investment comes at a time when Baidu is gearing up to rebuilt itself as an artificial intelligence(AI)-focused company, and transportation is seen by it as a key future earner.

Last month it announced it was making its self-driving vehicle platform open source, which means car makers around the world can tap into its technology to develop autonomous vehicles.

As well investing in Huochebang, Baidu Capital – which manages 20 billion yuan (US$2.87 billion) worth of investments – has also backed Nio, the electric car startup formerly known as NextEV.

Jennifer Li, Baidu’s chief financial officer, is taking over as CEO of Baidu Capital after nine years in her current post, Baidu said last Friday while reporting its first quarter financial performance.

“Unlike its peers such as Tencent or Alibaba, Baidu has missed out on many good investment targets in the mobile internet arena, and so it has now placed greater emphasis on mergers and acquisitions,” said Shi Jialong, analyst with Nomura.

Robin Li, Baidu’s chairman and CEO, also acts as chairman of Baidu Capital, and considers Li one of his most-trusted senior executives, Shi added.