Yimidida (YMDD), a Chinese logistics company that specialises in crowd-sourced delivery services in China's small counties and villages, has raised $266 million in Series D funding.
Boyu Capital led the round and was joined by existing investors GLP, Hopu Fund and Source Code Capital.
YMDD focuses on what it calls the less-than-carload business; in other words, those smaller and lighter orders that can’t fill a whole truck. Its skill rests in the efficiency of its management and a steady transportation network.
Road transportation has always been the first option for logistics in China, and it makes up about three-quarters of domestic logistics, according to research from TalkingData. But as of June 2017, there are more than 780,000 highway transportation companies, and most of them are small firms with only one or two vehicles.
The development of Chinese e-commerce has really helped to promote the logistics industry especially given the enthusiasm to order everything online. This includes larger products such as furniture and home appliances, which in turn has beefed up the less-than-carload logistics industry.
According to research posted by China Logistics Information Center, the country's less-than-carload logistics market grew 20% to Rmb1.37 trillion ($202 billion) in 2017 and is likely to hit Rmb2 trillion by 2020. In fact, the market now constitutes 34.7% of the road transportation industry.
Founded in 2015, YMDD aims to improve efficiency with its integrated system that targets this huge market. It began with regional partnerships and alliances all under the same management platform. Its network now covers 31 provinces and regions including Hong Kong and Taiwan, with 12,000 branches and 200 distribution centres.
YMDD intends to use proceeds to enhance efficiency and for R&D of its automation and monitoring system. The company wants to build an integrated system using AI and internet-connected devices.
As a fast developing company, YMDD previously raised Rmb1.1 billion in five rounds of investment between September 2016 and April last year. GLP has been its backer since its Series A round and it also has China Development Bank International Investment on board as an investor.
“It is one of the fastest-growing less-than-carload logistics companies in China,” said Paul Zhou, manager of private equity at China Renaissance. “We want to be YMDD's long term partner in the capital markets.” China Renaissance intends to help YMDD in its future M&A of other local logistics company.
Investors keep refuelling Chinese logistics players - from trucks and automation robots to logistics finance and IoT devices - to get a share of this trillion-dollar market. It is one on which the Chinese government has pinned its hopes if it expects to boost GDP growth.
