China's Uber for trucks close to securing US$1 billion in funding round to jumpstart driverless technology

  • Full Truck Alliance in advanced talks with backers, including SoftBank and Tencent, on funding that could peg its valuation at US$9 billion
  • Full Truck Alliance recently invested in a Silicon Valley-based driverless truck start-up, signaling its ambitions to go into autonomous trucking
PUBLISHED : Tuesday, 23 October, 2018, 3:06pm
UPDATED : Tuesday, 23 October, 2018, 3:33pm

Full Truck Alliance Group is close to securing as much as US$1 billion in new funds to replenish its war chest and jumpstart an expansion into driverless technology, according to people familiar with the matter.

China’s biggest online marketplace for long-haul deliveries is in advanced negotiations with new and existing backers, including SoftBank Group Corp and Tencent Holdings, on a funding that could hike its valuation by as much as 40 per cent to US$9 billion, the people said, requesting not to be named discussing private deals. But that is lower than an initial target of US$10 billion, reflecting cooling sentiment toward technology companies, the people added.

Truck Alliance, created by the merger of Huochebang and Yunmanman last year, is building up its marketplace to connect millions of mostly independent truckers. Led by chief executive Wang Gang -- an angel investor in ride-hailing giant Didi Chuxing -- it is trying to bring a fragmented, 5 trillion yuan (US$720 billion) arena into the smartphone age. It now wants to get into autonomous vehicles: Truck Alliance recently invested in, a Silicon Valley-based driverless truck start-up valued at almost US$1 billion and backed by Sequoia Capital, one of the people said.

Earlier this month, The Wall Street Journal reported that Truck Alliance was looking to raise US$1 billion at a US$10 billion valuation, but that investors were sceptical. People familiar told Bloomberg that the new round was close to getting finalised.

SoftBank CEO adds driverless tech to 300-year plan with GM deal

Truck Alliance, known also by its Chinese name Manbang, is proposing a sharply higher valuation based on an estimated 13 billion yuan of revenue this year, one of the people said. It is also promising its backers as much as five-fold growth in 2019 sales, the person added. Truck Alliance declined to comment.

Long-haul trucking, with its hours of cruising in relatively simple motorways, is a key opportunity to deploy automated vehicles. Major manufacturers from Daimler to Paccar are working on self-driving systems for commercial trucks. The field has also attracted start-ups such as Intel Corp-backed Peloton Technology, which helps automated trucks safely travel in formation.

Guizhou-based Truck Alliance, which raised US$1.9 billion at a valuation of US$6.5 billion in April, counts Capital G, Sequoia, GSR Ventures and Hillhouse Capital among its other investors. It is among a handful of start-ups seeking funds at the tail end of China’s unprecedented technology boom without having to swallow a down-round, or funding at a lesser valuation. Easy money is drying up amid a slowing economy and nationwide deleveraging campaign, while US tensions are fomenting caution among investors who increasingly bet only on a shrinking pool of elite startups. The wariness is extending into public markets as well: smartphone maker Xiaomi Corp. and internet services giant Meituan Dianping have both slumped since their recent debuts.

This Chinese lab wants to speed up data to enable driverless cars

Truck Alliance generates revenue from membership fees paid by customers such as factories that use its platform for long-haul service. It also makes money from taking a cut of truckers’ shipping fees and highway toll-card top-ups, and when truckers use its online payments system to buy gasoline.

It is using technology to streamline processes and boost efficiency in an industry where trucks can stand empty for hours and drivers rely on typically chaotic service centres to find their next load. As of August, the company had more than 1.5 million paying customers and 5.2 million truck members who use its platform for free, the company said in a statement. It is linked more than 3,000 petrol stations across the country, bringing business to underused outlets in return for driver discounts.

Truck Alliance has issued 1.55 million toll cards as of August, processes 130 million yuan of top-ups daily and handles 1 billion yuan of petrol purchases through its system monthly, according to the company. Its financing arm has helped 580,000 drivers access 6.5 billion yuan of loans, it said.