Banma steps up R&D on intelligent vehicle tech

Banma Technologies, a joint venture between Alibaba and SAIC Motor that focuses on developing smart operating systems for internet-connected cars, has raised Rmb1.6 billion ($233 million) to research and develop intelligent vehicle technologies.

The company's first-ever public fundraising was led by SDIC Fund Management, the private equity arm of State Development & Investment Corporation, and featured Yunfeng Capital and Shangqi Capital, Banma said on Thursday. And further fundraisings are planned.

The three year-old start-up did not divulge its post-money valuation but confirmed it has achieved so-called unicorn status – meaning it is a private company now valued at more than $1 billion. 

Banma’s capital raise illustrates how this year could be the busiest yet for private Chinese car-related companies seeking institutional investment.

Already in 2018 the automotive sector has seen private fundraisings from the likes of Pony.ai, Renrenche, XPeng and Souche, while electric car maker Nio and second-hand car trading app Uxin have successfully made their way onto the public market through initial public offerings.

For Banma, the fundraiser is of significant importance because it is now able to support its own operations with the new funds and becomes financially independent from Alibaba and SAIC Motor, which invested Rmb1 billion each to set the company up in July 2015.

Banma focuses on developing intelligent in-car systems based on Alios, an Alibaba-developed operating system for mobile, industrial and internet of things (IoT) devices. This differentiates the company from nearly all other intelligent car system developers running on Android systems.

Banma is the default OS for Roewe RX5

Banma’s in-car system features functions such as real-time navigation, voice interaction, car pre-heating and pre-cooling, smart parking and automatic toll payment, among others. It is the default operating system for SAIC’s electric sport utility vehicle Roewe RX5, which was launched two years ago.

The company has more ambitious goals to develop software systems to support what is commonly known as on-board diagnostics (OBD) – a vehicle's self-diagnostic and reporting capability.

An OBD system checks current vehicle conditions such as fuel status, engine temperature and carbon emission levels, and detects potential glitches before they turn into major problems.

But unlike generic in-car functions, these OBD applications are only possible if software developers like Banma can access data and information from the car manufacturers.

Ping Zhou, vice president of Banma, told FinanceAsia in March that it is difficult to ask carmakers to share their data because no one is willing to take the lead. That is understandable because that may imply disclosing their core technologies and other valuable information.

As such, Banma has been actively engaging with automakers through the years. Apart from SAIC Motor, the company has entered into agreements with Dongfeng Peugeot-Citroën, Ford and Qoros to install its systems in some of their new car models.

Hao Fei, chief executive of Banma Technologies, said the company will immediately kick off preparations for another funding round and hopes to join forces with more automakers in the future.