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GoGoVan secures US$250 million fundraising after merger

PUBLISHED : Friday, 13 July, 2018, 7:12pm
UPDATED : Friday, 13 July, 2018, 7:12pm

GoGoVan, Hong Kong’s first billion-dollar “unicorn” start-up, said it has raised US$250 million in the first phase of its new round of funding, led by InnoVision Capital.

Other investors include Alibaba’s logistics arm Cainiao, Russia-China Investment Fund, Hongrun Capital, Qianhai Fund of Funds, and 58 Daojia Group.

Since its establishment in 2013, GoGoVan has received funding from investors globally, including Centurion Private Equity, Renren, MFund, New Horizon Capital, Alibaba Entrepreneurs Fund, Singapore Press Holdings, and Hotung Investment Holdings, the company said in a statement on Friday.

The fundraising follows GoGoVan’s merger last August with 58 Suyun, the largest intra-city logistics platform in China.

“Since the merger, our business has been advancing rapidly. With the number of powerful investors on board in this round of funding, it shows that the market approves of our strategy,” said Steven Lam Hoi-yuen, chief executive officer and co-founder of GoGoVan. “We strive to simplify logistics and delivery services.”

Reuters cited Lam last year saying he was considering to raise up to US$200 million selling shares to strategic investors to help fund expansion.

One of GoGoVan’s ambitions was to eventually list in Hong Kong, according to Lam in an interview with the Post last year.

Proceeds from the latest US$250 million fund raising will be used to expand service offerings and grow new markets. GoGoVan will offer door-to-door service for the small item delivery segment in the next few months.

Co-founded with Nick Tang Kuen-wai and Reeve Kwan Chun-ma with just HK$20,000 (US$2,548), GoGoVan now enjoys the honour of being Hong Kong’s first “unicorn” start-up, with an estimated valuation of over US$1 billion after the merger.

58 Home, which owns a majority stake in the merged entity, is backed by Tencent Holdings and Alibaba Group Holding, and private equity investors KKR & Co LP and New Horizon Capital.

The company has more than eight million users for large businesses. It operates in a similar manner to ride-hailing companies such as Uber Technologies, providing on-demand van hailing services which connects customers with van drivers through an app. One of its main competitors in Hong Kong is Lalamove.

China’s e-commerce market has benefited logistics companies by spurring demand for transport services to help deliver products to customers.

However, intense competition has driven some e-commerce companies to develop logistics facilities and capabilities to control costs and quality through their own networks rather than using third-party logistics providers.

China’s logistics market surpassed the US in 2015 as the world’s largest, estimated at US$1.6 trillion according to iResearch. The sector is expected to grow at a compounded 2.1 per cent per year from through 2021, iResearch said.

Alibaba is the owner of the South China Morning Post.