Warburg Pincus leads round for China designated driver service

Set up four years ago, eDaijia operates designated driving services in 150 Chinese cities including Beijing, Shanghai, Guangzhou and Shenzhen. It has 80,000 registered drivers and receives 120,000 daily orders.

The company operates a mobile-based platform through which users can locate nearby drivers. It is a popular option for people who have been drinking and can't or don't want to drive home. In order to work with eDaijia, drivers must have at least five years of driving history, and undergo face-to-face interviews, road tests and written tests, and also pass a training and probation period.

Jiajun Yang, CEO of eDaijia, said the latest round of funding would be used to accelerate growth - he wants to have a presence in 200 Chinese cities by the end of this year - attract more talent, and improve services. The company also plans to enter new areas such as day-time services, car-washing and chauffer services, expand overseas following a successful debut in South Korea.

"We are confident with the eDaijia's market-leading position and growth potential, and we value the company's commitment to social responsibility and its role as a provider of income for its drivers and safe and convenient services for its customers," said Julian Cheng, managing director and head of tech, media and telecom investments at Warburg Pincus, in a statement.

The company's previous round came in October 2014 when classifieds marketplace 58.com put in $20 million, with Matrix and Lightspeed contributing another $5 million. Matrix seeded eDaijia in 2012, provided the Series A round later the same year, and then teamed up with Lightspeed for the Series B in January 2014.

The investment comes shortly after PE-backed Kuaidi Dache and Didi Dache - the dominant, and recently merged, players in China's taxi-booking app space - announced they would introduce a designated driver service and had already signed up 30,000 drivers.

The two companies have already extended their businesses beyond purely acting as a mobile interface between taxis and passengers. For example, they have also rolled out private car booking services to serve high-end customers, issuing a direct challenge to the likes of Uber and Yongche. While Uber partners in China with domestic search giant Baidu, Yongche has received local PE investment.

There continues to be uncertainty about the future of ride-hailing services in China. In January the Ministry of Transport issued a ban on private cars using ride-hailing apps, citing safety concerns. The following month the minister of transport said private cars will never be permitted to operate for commercial use, although he appeared more open to the concept of peer-to-peer (P2P) car-sharing.

Kuadi and Didi primarily work with taxi companies and professional drivers, although they have now followed Uber's lead and launched not-for-profit car-pooling services. Two P2P car-sharing specialists, Tiantian Yongche and Baojia.com, have both received VC support in recent months.

Warburg Pincus has backed a number of Chinese tech start-ups, including online used car auction company Uxin, mobile shopping portal Koudai Gouwu, online recruitment services provider Liepin.com, and 58.com.

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• Topics
• Expansion
• Technology
• Consumer
• Greater China
• Venture
• Warburg Pincus Asia
• China
• TMT
• Consumer
• Transportation
• Lightspeed Venture Partners
• Matrix Partners
• Growth capital
• Venture