Hong Kong’s Uber-style on-demand delivery giant Lalamove is close to raising $1.5 billion in another big-ticket funding round, just one month after it completed its Series E round at $515 million.
The new round could potentially bring the startup’s post-money valuation to $10 billion.
The new financing will be Lalamove’s Series F round, composed of three parts of capital transactions, Chinese media outlet All Weather TMT first reported. The first two tranches of $1.3 billion were led by Asia-focused private equity (PE) powerhouse Hillhouse Capital and completed on January 21. The third tranche of $200 million is yet to be closed.
Lalamove did not respond to DealStreetAsia’s email requests for comment.
Lalamove was founded in December 2013 in Hong Kong to provide users with on-demand and same-day delivery solutions using vehicles of all sizes, such as lorries, trucks, vans, cars and two-wheel vehicles, through mobile and web apps.
The firm’s customers include individuals in need of home-moving services, as well as brick-and-mortar stores, restaurants, retail chains, and e-commerce businesses. It serves clients including Chinese e-commerce giant JD.com, state-owned oil refiner Sinopec, and convenience stores chain 7-Eleven.
The new investment comes as competition in China’s on-demand logistics market is heating up. Revenues of the country’s major logistics players quickly bounced back after months of depression due to the COVID-19 pandemic.
Lalamove, which had operations across 352 cities in mainland China as of last November, once saw its monthly order volume plunging as much as 93% in early 2020 at the prime time of the pandemic hit.
Its business had a sharp rebound before China’s week-long national holiday in October, with the order volume jumping 82% year-on-year, the firm disclosed in a statement in late December. It recorded 480,000 monthly active drivers and 7.2 million monthly active users (MAUs) on the platform as of November 2020.
Lalamove’s arch-rival Manbang Group, a Guizhou, China-based freight service that connects truck drivers with shippers on a mobile app, scooped up $1.7 billion in a funding round jointly led by Fidelity, SoftBank Vision Fund, and Sequoia Capital China in November 2020. Chinese tech news portal 36kr reported earlier this month that Didi Huoyun, a cargo shipping service firm launched by Chinese ride-hailing giant Didi Chuxing in 2020, attracted $3 billion in bids for its fundraising offer of $400 million.
To tackle the fiercer competition with its domestic counterparts, Lalamove is ramping up efforts to rake in more capital. If confirmed, the Series F round could be the firm’s eighth funding round.
In its latest fundraising, Lalamove had raised $515 million in a Series E round in late December 2020. The previous round was led by Sequoia Capital China with participation from Hillhouse Capital and Shunwei Capital, a venture capital (VC) firm backed by smartphone maker Xiaomi’s co-founder Lei Jun – all existing shareholders of Lalamove.
Outside of China, Lalamove has operations in 24 markets across Asia, Latin America, and most recently, the US.
The firm had told DealStreetAsia its plan of expanding into the US in Q3 2020, as it sought to capitalise on the massive demand for tech-enabled delivery solutions, especially among small businesses suffering from the coronavirus outbreak.
Lalamove managing director (international) Blake Larson said the company set a target to build a presence in 10-15 US cities within one year. Since it marched into the US market last October, starting with the Dallas-Fort Worth area, the firm has by far expanded operations to Chicago and Houston.