Lalamove, the Hong Kong-based on-demand delivery startup, announced yesterday it has closed a US$10M funding round led by China’s Crystal Stream Capital. Other investors include Geek Founders, Mindworks Ventures, Sirius Venture Capital, Aria Group, and individual investors.
According to Lalamove board member Blake Larson, the funding will be used to ramp up expansion across Southeast Asia and mainland China. Its app is live in Singapore and Thailand, and has been accessible in Shenzhen and Guangzhou since mid-December. Taipei residents should be able to use it in the coming weeks, according to Larson.
Larson tells Tech in Asia that Lalamove’s operations in mainland China will be run by Shing Chow, the company’s CEO and cofounder. Larson will oversee all other Asian markets for the time being.
“A lot of investors will typically advise companies to do China or Southeast Asia, but not both, because China is its own animal,” says Larson. “You don’t see a lot of cross over. Look at Kuaidi and Didi, for example – they’re in China in 300 cities, and they don’t need to be in any other countries. Shing is Hong Kongese but is born in China, speaks Mandarin and Cantonese, and obviously in Shenzhen and Guangzhou that will come in handy.”
Recognizing the power of WeChat, the team has integrated its services into the popular messaging app with an official account.
Mainland China will be a market to watch for Lalamove. For one thing, logistics is a hot space in the Middle Kingdom, with the nation’s internet giants sinking in large sums of money into improving delivery infrastructure. Last year Alibaba invested hundreds of millions of dollars into China Smart Logistics, which it now owns a 48 percent stake in according to The New York Times. Tencent, meanwhile, purchased an 18 percent stake in ecommerce company JD, which is famous for its robust delivery network. It also helped give US$16 million to Renren Kuaidi, a Kozmo-esque delivery startup. That’s pennies for Tencent, but it nevertheless shows that the stuff-on-demand dream is alive and well in China.
Gogovan, Lalamove’s competitor in Hong Kong, also expressed its commitment to cracking China when it disclosed a US$10 million investment from Renren, one of China’s biggest social networks. Crystal Stream’s pedigree is arguably comparable to that of Renren – it’s managed by Zheng Chenchao, co-founder of China’s Qunar, and Wang Mengqiu, formerly vice president at Baidu. Hillhouse Capital, which got in early on JD and Qunar, owns a majority stake in the fund.
See: Easyvan and Gogovan take “Uber for Logistics” to Asia
Lalamove and Gogovan both emerged in late 2013 with the goal of applying Uber’s vehicle-on-demand model to the urban logistics industry. Users can open the app, specify the goods they want moved (anything from a cup of coffee to 500 kilograms of coffee beans), and the order is then sent out to a network of drivers.
Compared to Uber or passenger transport, however, goods transport is arguably more complicated. Whereas passenger transportation networks carry human bodies from one place to another, “stuff” transportation networks have to manage diverse orders (one pizza versus 100 pizzas), diverse clients (individuals versus small businesses), diverse vehicles (motorcycles versus vans), and multiple destinations (drop 50 pizzas off at Wan Chai and then another 50 at Causeway Bay). Larson expects the bulk of Lalamove’s order volume in Southeast Asia will come from large logistics providers who outsource their last-mile delivery to third-parties.
Felicia Moursalien of aCommerce, a startup that manages back-end fulfillment for ecommerce companies in Southeast Asia, predicted that 2015 would be the year that Uber and its ilk begin to move into logistics. This could be a tall order. While Uber has a brand name and a strong data team, logistics-first competitors will have experience and relationships specific to freight transport.
Editing by Steven Millward, top image by Lalamove
This post Hong Kong logistics startup Lalamove nabs $10M from Chinese investors appeared first on Tech in Asia.
Hong Kong logistics startup Lalamove nabs $10M from Chinese investors
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