CAR Inc. has announced that it is forking out US$50 million to take part in UCAR Group’s Series B financing. The financing round generated a total of US$550 million for UCAR, the operator of CAR Inc’s UCAR chauffeurerd service. UCAR market value is boosted to US$3.55 billion following this round of financing.
Taking into account the Series A financing that raised US$250 million for UCAR in July, the company has already netted a total of US$800 million in the two rounds of financing within just over two months, a record amount of funds raised in two initial rounds of financing among China’s internet startups.
Unlike other car use platforms such as Uber and Didi that use private cars in their C2C platforms, Ucar differentiates itself by using CAR Inc.’s car pool and other quality rental vehicles and professional drivers trained specifically for the service to offer safe and standardized service.
Ucar gives away regular value-added offers such as “Top up for 100 yuan and get 80 yuan free” to boost sales, and promote itself as “safe and cheap”. Analysys International’s data indicate that UCAR currently ranks third among all car hire service platforms after seven months in the market, and that it is the leading brand in the top-end chauffered service, with customer retention rate ahead of Didi and Uber.
Latest information indicate that the regulations on network hired car service, spearheaded by the Ministry of Transportation and Communications, will be implemented this month. The regulations reiterate the prohibition of private cars operating as hired cars, and clearly state the criteria for hired car platforms, drivers, pricing and services. Industry observers believe the regulations will be give an edge to UCAR.
The three-way competition among Uber, Did and UCAR is intensifying as each is vying for financing. Didi recently completed another round of financing raising US$3 billion, and Uber’s success in raising funds has been on the news, though the sector’s pioneer Yongche hasn’t had much luck in getting investors’ attention. UCAR with a short history of eight months yet managed to raise US$800 million shows that investors are looking favorably of its differentiation from the other car hire platforms. (Translation by Shuk)
