China car wash business achieves unicorn status
1km, China’s largest car wash company, has achieved a valuation of more than $1 billion on closing a Series D funding round across two tranches. It did not specify the size of the round.
The first tranche was led by SDP Investment and the second by Goldman Sachs Asset Management. The new capital will go towards recruitment, the implementation of automated technology, R&D into autonomous driving, and international business development, according to a statement.
Founded in 2014 and headquartered in Hangzhou, 1km offers an around-the-clock service using fully automated machines. It has 2,500 outlets in 138 cities, typically located alongside automotive service stores, gas stations, office buildings, supermarkets, and parking lots. Total users to date exceed 12 million.
1km has obtained 200 patents, including 40 related to autonomous driving. One of its key assets is a self-developed operation and maintenance system for smart factories and unmanned stores. It enables full digitalization of the production process and can be utilized in cross-border operations.
A 1km car wash can take as little as three minutes and costs RMB10-30 ($1.50-4.60). The company also claims to provide the most environmentally friendly service in China. Its machines use as little as 16 liters of water per wash - 20% of the amount typically used in manual car washes. Wastewater is run through a recycling system and reused.
The company raised RMB600 million in Series C funding across three tranches last year. ClearVue Partners, PICC Capital Equity Investment - the private equity arm of state-owned People’s Insurance Company of China - and Centurium Capital were among the participants.
In 2019, it received a strategic investment from Alibaba Group and was subsequently integrated into the internet giant's automobile after-sales services platform.
Following the Alibaba commitment, 1km accelerated its growth and became the number one player in the market. Competitors include Big Box, which is backed by 5Y Capital. Broadly speaking, there are two business models: companies can open self-service cash wash stations, which usually return the principal in two years; or they can rent or sell equipment to gas stations.
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