Geely EV rental spin-out secures $97m Series A

The capital came from state-owned construction conglomerate Yincheng Group and Hangzhou Puzhao, a local internet services company focused on the automotive sector. It will be used for R&D, collaboration with car manufacturers, and geographic expansion.

The round follows Xiaolinggou's acquisition last month of Zuozhongyou, a Hangzhou-based electric micro-bus operator. 

With car sales in China dropping 8% year-on-year in 2019, Gang Hu, founder and CEO of Xiaolinggou, believes many automotive manufacturers will team up with ride-hailing and vehicle rental platforms to digest inventory and revitalize assets. For example, state-owned BAIC Group is looking to acquire up to 21% of China Auto Rental (CAR) to become the single largest shareholder.

In April, Warburg Pincus agreed to acquire a 17.11% stake in CAR from Ucar, a chauffeured car service provider. It followed a sharp drop in CAR’s share price following a scandal at Luckin Coffee, which is backed by the founder of CAR. The deal was spread across two tranches, of which only the first was completed.

Xiaolinggou has strategic partnerships with several new energy car makers, including Geely, BYD, BAIC, SAIC Motor Corporation, Hozon Auto, Chery Automobile, and Xiaopeng. It has a fleet of 98,000 vehicles available from more than 800 outlets across 80 cities. It has served over 1.5 million customers that have driven an aggregate of 590 million kilometers.

Rentals can be from one day to several years. The Xiaolinggou website highlights the flexibility and cost of rentals versus the costs of buying a vehicle in a bid to attract long-term customers. The company responded to the COVID-19 outbreak by offering rentals for RMB999 per month, less than spending RMB30 per day on taxis.

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• Topics
• Greater China
• Early-stage
• Cleantech
• China
• automobiles
• Transportation