Chinese new energy vehicle rental platform raises $43m
DST, a new energy vehicle rental service platform that mainly serves logistics companies, has raised RMB300 million ($43 million) in the first tranche of a Series B round led by Bojiang Capital, with participation from Japan's Itochu Corporation.
Existing investors Qiming Venture Partners and Matrix Partners China also re-upped. Qiming previously provided RMB50 million in pre-Series A funding in 2017 and was then joined by Matrix in a RMB300 million Series A round in March.
The new capital will be used to upgrade the company’s nationwide network – which currently comprises 3,000 charging stations across 50 cities – speed up delivery of vehicles to clients, and improve customer service levels, according to a statement.
Founded in 2015, DST provides new energy vehicle rental services to over 1,500 clients, including the logistics arms of JD.com and Alibaba Group as well as SF Express, China’s second-largest courier company. It has more than 16,000 vehicles of different types, ranging from minivans to refrigerated trucks.
The company was launched to meet the rising demand for courier services in China. This has to a large extent been driven by the growth in e-commerce, for which transaction volume is set to reach RMB7.5 trillion in 2018, according to PwC. China’s State Post Bureau has stated that 40 billion packages – for all purposes, not just e-commerce – were delivered in 2017.
Reducing delivery fleet costs has become a key issue for many logistics operators. DST claims that its vehicles are 20-25% cheaper to run than gasoline-fueled vehicles. SF Express recently announced that it would introduce replace traditional trucks with 10,000 new energy vehicles in 30 cities in by the end of this year.
China is one of the largest markets globally for electric vehicles and hybrid cars with several well-funded start-ups including Xpeng Motors, CHJ Automotive, WM Motor Technology, and Skio Matrix. Xpeng closed an extended Series B round in August with RMB4 billion in commitments, achieving a valuation in excess of RMB25 billion.
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