iCarsclub, a car sharing platform more commonly known as PPzuche in China, secured US$10 million of Series A financing led by Sequoia Capital China and followed by Crystal Stream Capital.
The funding will be used to expand car fleet and construct customer service team, according to the company’s CMO Wang Jiaming. The startup has received 3 million yuan (US$480K) of angel investment from Singapore government-backed National Research Foundation and Redot Venture.
Instead of owning cars, PPzuche creates a virtual fleet from car owners who list their cars on the car sharing platform and rent them out to nearby drivers who can use the app for key-less entry. The Singapore-startup entered Chinese market by rolling out service in Beijing last October and planned to expand to more Chinese cities like Shanghai and Guangzhou. To protect the interest of car owners, PPzuche cooperates with PICC in China to provide insurances for all the personal cars on the platform.
Wang disclosed that PPzuche has more than 30K users (mostly between 25-35 years old) and over 10K personal cars available for rental in Beijing. He thinks Chinese market potential for private car rental is huge, since nearly 17% of private car users in Beijing and Shanghai are willing to rent out their cars, according to a survey conducted by the company. (the figure for Singapore is 19%)
PPzuche commercializes the service by taking a certain amount of commissions from the rentals, a sharing economy business model similar to room-sharing service Airbnb’s, which has been questioned for its legality by the New York attorney general earlier this year. Belgium also declared the U.S car-hailing service Uber to be illegal in the country this Feb.
Although PPzuche only provides private car rental service rather than driving services, it is suspected of illegal operation for running transportation business without governmental authorized licenses, according to Guo Chunping, a lawyer with Beijing Yingke Law Firm.
But Wang defended they have consulted the matter with an expert from transportation unit of the State Council, who said that PPzuche’s business belongs to the range of disposal of personal belongings.
Compared with Sequoia Capital, Crystal Stream Capital is a young venture capital company focused on startups. Backed by Hillhouse Capital Group and Zhuang Chenchao, CEO of Qunar, the investor has invested in online education service Kuailexue, legal service site Fadoushi,gay flirting app Blued, etc.
image credit: PPzuche