IFC proposes $20m investment in China's Huochebang
The International Finance Corporation (IFC), the investment arm of the World Bank, is considering a commitment of up to $20 million to China-based online logistics platform Huochebang.
IFC's investment will be part of the company's Series B round, which will include several other leading institutional investors, according to IFC's disclosure. Huochebang will use the proceeds to improve its technology platform and expand its services aimed at improving the efficiency of China's long-haul logistics sector.
Founded in 2007, Huochebang connects cargo shippers and truck drivers through its online platform and mobile app. It also operates a second-hand vehicle trading service, which it introduced last year. Genesis Capital led a $35 million funding round for the company in April, which brought Huochebang's total funding to over $100 million including an extended Series A round in 2015 with participation by Eastern Bell Venture, Tencent Holdings, DCM and Hillhouse Capital.
IFC intends to help Huochebang as a long-term financial partner, providing loans and assistance to the company in obtaining support from local banks and enhancing the company's credibility among other institutional investors. It will also use its global network and customer base to assist Huochebang in its planned overseas expansion.
Demand for efficient and high-quality logistics solutions is growing in China as the country's e-commerce industry continues to grow. Private capital has flooded into the sector in the last several years, both through private equity funds and directly from sovereign wealth funds and pension funds. This April Cainiao Network Technology, a logistics platform launched by Alibaba Group, raised a $1.5 billion round led by Singapore's GIC Private and Temasek Holdings, Malaysia's Khazanah Nasional, and China's Primavera Capital.
IFC also has interests in China's logistics sector, having participated in a $760 million round this September for Best Logistics Technologies led by Everbright Financial Holding Asset Management and CITIC Private Equity. The amount of IFC's investment had earlier been announced as up to $30 million,
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