China’s top Uber-like truck apps to merge

Deal set to cre­ate com­pany val­ued at more than US$2bil

The Star Malaysia - StarBiz - - Front Page -

HONGKONG: Huochebang and Yun­man­man, China’s two big­gest apps for Uber-like truck ser­vices, have agreed to merge, cre­at­ing a com­pany val­ued at more than US$2bil, peo­ple fa­mil­iar with the mat­ter said.

Wang Gang, a backer of Yun­man­man’s and an an­gel in­vestor in ride-hail­ing gi­ant Didi Chux­ing, will be­come the chief ex­ec­u­tive of­fi­cer of the new en­tity, the peo­ple said, ask­ing not to be iden­ti­fied be­cause the in­for­ma­tion is pri­vate. The com­pa­nies are al­ready in the process of seek­ing new fund­ing to sus­tain their rapid pace of ex­pan­sion, the peo­ple said. They could an­nounce the deal as early as Mon­day, the peo­ple added.

The merger would end a costly and frosty bat­tle and cre­ate a dom­i­nant player in a do­mes­tic truck­ing mar­ket es­ti­mated to be worth 5 tril­lion yuan (US$753bil). It’s the lat­est cor­po­rate tie-up to emerge from an in­creas­ingly com­pet­i­tive tech­nol­ogy sec­tor, the most prom­i­nent be­ing the mar­riage of Didi Chux­ing and Uber’s Chi­nese business.

Yun­man­man rep­re­sen­ta­tive Johnny Xu, who this month de­nied the pair were con­sid­er­ing a merger, didn’t re­spond to re­quests for com­ment. Ju­lia Zhu, a spokes­woman for Yun­man­man, said she couldn’t im­me­di­ately com­ment. Jarry Yan, a spokesman for Huochebang, also de­clined im­me­di­ate com­ment.

Wang doesn’t cur­rently hold an ex­ec­u­tive po­si­tion with ei­ther com­pany. He pre­vi­ously held man­age­ment roles at e-com­merce gi­ant Alibaba Group Hold­ing Ltd and its Ali­pay af­fil­i­ate be­fore be­com­ing an an­gel in­vestor in Didi.

Yun­man­man and Huochebang – known also as Truck Al­liance – com­pete in a sec­tor where more than 200 out­fits are fight­ing for a slice of business. While 80% of the coun­try’s cargo is car­ried by road, trucks of­ten spend hours stand­ing empty in vast park­ing lots and their driv­ers rely on typ­i­cally chaotic ser­vice cen­ters to find their next load.

Both com­pa­nies are backed by in­vestors with deep pock­ets and use tech­nol­ogy to match driv­ers with car­goes via their smart­phones, as well as sell truck­ers toll cards, gaso­line, tires and sec­ond-hand ve­hi­cles.

Yun­man­man, for­mally known as Jiangsu Man Yun Soft­ware Tech­nol­ogy Co, has back­ing from Se­quoia Cap­i­tal and Yun­feng Cap­i­tal, the ven­ture fund co-founded by bil­lion­aire Alibaba co-founder Jack Ma.

Truck Al­liance, which has been val­ued at more than US$1bil, has Ten­cent Hold­ings Ltd, Baidu Cap­i­tal, Hill­house Cap­i­tal, In­ter­na­tional Fi­nance Corp and All-Stars In­vest­ment Ltd on its side. — Bloomberg.

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