VC-backed eHi Car Services raises $120m in US IPO

The company, which claims to be China's second-largest car rental services provider, sold 10 million American Depository Shares (ADS) at $12 apiece, the bottom end of the indicative range, according to a regulatory filing. None of the venture capital backers made partial exits via the offering.

There was also a concurrent private placement which saw Dongfeng Asset Management, China Universal Asset Management and Ctrip invest $30 million, $10 million and $10 million, respectively. Ctrip, China's largest online travel-booking platform, is already an investor in eHi as well as a preferred business partner. The two companies have integrated reservation systems.

Established in 2006, eHi has a fleet of more than 15,000 vehicles covering over 90 cities. As of June, the firm had 550,000 registered members and over 32,000 corporate clients. It derived two-thirds of last year's revenue from rentals, with the rest from chauffeured car services.

EHi also has a collaborative arrangement with Kuaidi Dache, one of China's two dominant taxi-booking apps, whereby eHi's premium car services will be made available through the Kuadi platform. It also participated in a Series B round of funding for Travice Inc, developer and operator of Kuaidi, and now holds an 8.4% interest in the business.

According to AVCJ Research, the company first received VC funding in 2006 with a $5 million investment from Ignition Partners and Qiming Venture Partners. Qiminig returned in 2009 to invest $20 million alongside CDH Investments and Jafco Asia. In 2010, the firm raised a further round worth $70 million led by Goldman Sachs, with participation from New Access Capital, Qiming, CDH, Ignition and Jafco.

Ctrip International, China's largest online travel agency, committed more than $100 million in eHi last year to become the second-largest investor after US car rental firm Enterprise Holdings. Enterprise is the holding company for businesses such as Enterprise Rent-A-Car and National Car Rental. It also sells used cars through Enterprise Car Sales.

Ctrip now owns 22.1% of the company and Crawford - parent company of Enterprise Holdings - has 21.1%. CDH owns 12.2%, while Qiming and Goldman have 11.5% and 10.2%, respectively. Ignition holds 8.7%.

While the revenue increased from RMB450 million ($73 million) in 2012 to RMB566 million last year, eHi has yet to turn a profit. It posted a net loss of RMB152 million in 2013, compared with RMB176 million in 2012. The proceeds of the offering will be used to expand eHi's car fleet, develop its service network, and for working capital.

J.P. Morgan and Goldman Sachs managed the share sale.

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• Topics
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• Qiming Venture Partners
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