BEIJING – Full Truck Alliance Group, a lorry-hailing firm in the mold of Didi and Uber, is close to securing as much as $1 billion in new funds to replenish its war chest and jump-start an expansion into driverless technology, according to people familiar with the matter.
China’s biggest online marketplace for long-haul deliveries is in advanced negotiations with new and existing backers, including SoftBank Group Corp and Tencent Holdings Ltd, on a funding round that could hike its valuation by as much as 40 percent to $9 billion, the people said, requesting not to be named discussing private deals.
The estimate is lower than an initial target of $10 billion, reflecting cooling sentiment toward tech companies, the people added.
Truck Alliance – created by the merger of Huochebang and Yunmanman last year – is building up its marketplace to connect millions of mostly independent truckers.
Led by CEO Wang Gang – an angel investor in ride-hailing giant Didi Chuxing – it is trying to bring a fragmented, 5 trillion yuan ($720 billion) arena into the smartphone age.
It now wants to get into autonomous vehicles. Truck Alliance recently invested in plus.ai, a Silicon Valley driverless truck startup valued at almost $1 billion and backed by Sequoia Capital, one of the people said.
The Wall Street Journal reported this month Truck Alliance was looking to raise $1 billion at a $10 billion valuation, but that investors were skeptical. People familiar with the matter told Bloomberg that the new round was close to getting finalized.
Truck Alliance – known also by its Chinese name Manbang – is proposing a sharply higher valuation based on an estimated 13 billion yuan of revenue this year, one of the people said. It is also promising its backers as much as fivefold growth in 2019 sales, the person added. Truck Alliance declined to comment.
The company claimed it served around 5.2 million trucks and 1.25 million logistics firms, which gives it a big market share in the country.
According to a 2017 report by Chinese internet of things and big data company G7 and global consulting firm Bain & Co, China’s road freight market size had hit 5 trillion yuan, making it the world’s biggest road transportation market. The nation’s road freight reached 6.1 trillion ton-kilometers, covered by a fleet of more than 5 million heavy trucks and over 14 million light and medium trucks, the report said.
Long-haul trucking, with its hours of cruising in relatively simple highway environments, is a key opportunity to deploy automated vehicles. Major manufacturers from Daimler AG to Paccar Inc are working on self-driving systems for commercial trucks. The field has also attracted startups such as Intel Corp-backed Peloton Technology Inc, which helps automated trucks safely travel in formation.