Caocao Chuxing, the ride-hailing arm of automaker Geely, announced the completion of Round B financing worth 3.8 billion yuan ($589 million) on Monday, which will be used for the improvement of services for drivers and passengers, as well as the R&D and application of new technologies.
Caocao Chuxing’s investors include Suzhou Xiangcheng Financial Holding (Group) Co., LTD., Suzhou High-Speed Railway New City State-Owned Assets Holding (Group) Co., LTD., Suzhou Urban Construction Investment and Development Co., LTD., ABC International Investment (Suzhou) Co., LTD., and Dongwu Innovation Asset Management Co., LTD.
This financing is not only the first domestic equity investment for a ride-hailing company this year, but also the largest financing for a ride-hailing company in China since 2020. It indicates that investors might have identified new opportunities in this space, possibly due to the Cyberspace Administration of China’s cybersecurity recent investigation into ride-hailing giant Didi.
“The fresh funds will also help us to step up efforts in key work such as technology research and development, business expansion, service quality improvement and driver protection, so as to further enhance our competitiveness, ” said Gong Xin, CEO of Caocao Chuxing.
Established in 2015, Caocao Chuxing provides ride-hailing services in 62 cities across China, with more than 60 million registered users, more than 13.5 million monthly service users, and 3 million registered drivers. “Through continuous refined operations, Caocao Chuxing’s orders in July hit a record high, 150 percent of that in the same period last year,” Gong added. According to a public report by Equal Ocean, Caocao Chuxing’s monthly active users exceeded 10 million in July.
“The layout in the ride-hailing field is one of the key measures in Geely’s transformation strategy. We will empower Caocao Chuxing in an all-round way with leading technology of Internet of vehicles, autonomous driving and new energy,” said Li Shufu, Chairman of Geely.
Caocao Chuxing also announced that it would situate its headquarters in Suzhou, Jiangsu Province. At the financing event, Gong Xin announced its “N3” strategy – New Car, New Power and New Ecosystem.
By the end of 2020, China had 365 million ride-hailing users, accounting for 36.9 percent of all Internet users, according to data from the China Internet Network Information Center. The penetration rate of online car hailing in first-tier cities is the highest, reaching 50.3%. The penetration rate in new first-tier cities, second-tier cities and below are 20.3% and less than 10%, respectively.