China’s LeTV buys control in VC-backed Yongche
Chinese media company LeTV Holdings has acquired 70% in Yongche.com, facilitating an exit for existing shareholders in the car rental and taxi-booking app.
The company will pay $700 million, according to a statement seen by Reuters. This would classify Yongche as a unicorn with a valuation of $1 billion or more.
LeTV is investing through its subsidiary LeTV Auto, according to an announcement posted on the company's Weibo microblog. The remaining shares will be held by Yongche's existing management team led by CEO Hang Zhou. "LeTV will bring a refreshed auto ecosystem to Yongche. com, injecting a lot of resources and talents," LeTV said.
In December of last year, Yueting Jia, founder and CEO of LeTV, introduced an initiative to produce a new generation vehicle called Le Supercar, which will integrate internet technology into electric cars. Earlier this year, the company created an operation system - LeUI Auto Lite - for cars that allows drivers to use internet-enabled functions such as navigation, entertainment and auto parking.
Yongche operates an online and mobile platform through which users can book cars. It also provides services such as hourly and daily rental and airport transfers, contracting vehicles from small and mid-size car rental companies. The ride-calling app competes directly with Uber China and Didi Kuaidi.
The start-up has raised several rounds of funding. Zhenfund provided seed funding when the company was established in 2010, while Morningside Technologies invested in Series A round together with Qualcomm Ventures in August 2011.
In April 2013, it secured a $20 million Series B round led by China Broadband Capital (CBC), alongside Morningside and Qualcomm. The company went on to receive $60 million from Chinese travel website Ctrip.com and DCM. Yongche's last round was completed in September 2013, with GIC Private among the investors.
LeTV started out as an online video portal - LeTV.com - in 2004. The company went public on Shenzhen's Growth Enterprise Market in 2010. The following year it set up a movie production house - Le Vision Pictures - producing local movies as well as financing and distributing Hollywood imports into China.
The company has been aggressively expanding into other businesses such as e-commerce, smart TV and content production. In May, LeTV.com spun off its sports channel - LeTV Sports - and raised RMB800 million ($129 million) in a Series A round of funding from Yunfeng Capital and conglomerate Dalian Wanda Group.
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