Uber-like startup, Yidao Yongche receives $700M of investment
China uber-like startup, Yidao Yongche announced that the company will be receiving a huge investment from a Beijing-based company, LeTV. According to Yidao Yongche's statement, the three-year-old company is receiving investment worth $700 million by LeTv for 70 percent stake in the ride-hailing app company.
According to Reuters, LeTV will be the major shareholder for the startup but the further investment amount that will be made by the company is confidential. The investment obtains by Yidao Yongche is raising the company's valuation up to $1 billion. However, the valuation is still small compared to another player in the same field such as Didi Kuaidi and Uber.
According to an analyst, Yidao Yongche is currently holding around 0.7 percent to 2.7 percent in the ride-hailing industry as reported by TechCrunch. While Uber and Didi Kuaidi on the other hand, are competing to become the top app used by the Chinese.
LeTV or formally known as Leshi Internet Information and Technology Corp Beijing is a Shenzhen-based technology company that is producing a smartphone which competes against the Xiaomi smartphone company. The company business also includes internet television and development of electric-vehicle as reported by VentureBeat.
Yidao Yongche business plan is unique unlike Didi Kuaidi as the company also operates outside China. The company is creating a niche market for themselves by catering to Chinese tourist in the US who cannot speak English. Currently, the company is operating in 20 cities in the US alone and is expected to increase its operation soon.
According to its founder, Zhou Hang, the company's strategy is unique and he was quoted of saying "Most Chinese don't speak English and find it difficult to communicate with foreign drivers after they land in another country. We have Chinese-speaking drivers in the U.S. and other places to make it seamless and stress-free"
The ride-hailing apps has seen a big rise in the China market today. Even Uber was reported to have predicted that profit obtains from its business in China will surpass the US in few more years as the company obtains more permits to enter into all major cities in China.
Currently, the biggest investment obtain, for this type of app goes to Didi Kuaidi which receives billions of investment as the company is backed by big China technology companies including Alibaba Group Holding Ltd and Tencent Holdings Ltd. However, with the growing demand, company's valuation for this sector is expected to continue increasing.