China ride-hailing app T3 Go raises $1.2b
T3 Go, a Nanjing-based ride-hailing platform, has raised a RMB7.7 billion ($1.2 billion) Series A round led by CITIC Investments. Redview Capital and Virtue Capital also took part.
This is the largest round in China’s ride-hailing space since 2018. It comes as several operators - Meituan, Gaode, Haro, Dida Chuxing, and Caocao Chuxing, as well as T3 - look to capitalize on the misfortunes of market leader Didi.
Within days of Didi going public in the US at the end of July, regulators launched an investigation into the company over data privacy violations. New user registrations and app downloads were halted. Didi is currently trading at a 41% discount to its IPO price, and the company's market capitalization is below its peak pre-IPO private market valuation.
According to local media reports, T3 plans to take some of Didi’s market share and establish itself as the country's number-two ride-hailing player. All employees engaged in R&D and product development will take no time off in October as they work towards this goal. T3 wants to enter 15 new cities by the end of the month.
The Series A also features strategic investors such as Yingtong Technology and LY.com, an online travel agency under Tongcheng-Elong. Several investors from T3's angel round have re-upped, including featured FAW Group, Dongfeng Motor, Changan Auto, Alibaba Group, and Tencent Holdings.
Established in July 2019, the company operates in 41 cities and claims 54 million registered users. On September 30, daily orders exceeded two million for the first time, representing a 100% increase from the peak daily order level for the second quarter.
T3 seeks to differentiate itself from the likes of Didi through heightened safety measures. An in-house developed digital video recording system captures the road view through the windshield and connects to a central surveillance platform
According to the China Internet Network Information Center, there were 365 million users of online ride-hailing platforms at the end of 2020. Competition is shifting from user growth to user retention -as the industry becomes saturated - with a focus on faster pick-up times and higher quality transportation.
Other recent investment activity in the space includes a RMB3.8 billion ($588 million) Series B in September for Caocao, which is owned by local automaker Geely. The capital came from five state-backed investors.
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