Hong Kong-listed car rental service CAR Inc. today announced that it has injected US$50 million in Series B funding of UCAR, the operator of its chauffeured car unit Shenzhou Zhuanche in exchange for 443,263 shares in the company. Following this deal, Car Inc. will hold approximately 9.9% of the total issued and outstanding shares of UCAR.
Other investors, including Warburg Pincus affiliate Tourmaline Gem, Legend Capital-backed investment institution Harmony, Haode Investment and the company’s board chairman & CEO Lu Zhengyao, also participated this round and the total consideration including Car Inc.’s investment amounts to US$550 million.
The funding comes just one month a $250 million USD round led by Car Inc. with participation of Warburg Pincus and Legend Capital. Of this round, Car Inc. contributed $125 million USD for a 10% stake in UCAR.
UCAR is one of the largest chauffeured car service providers in China, covering 60 cities nationwide. Different from other competitors like Didi Chuxing (Didi Kuaidi) and Uber that relied on private cars and crowd-sourced drivers, Shenzhou Zhuanche’s services are offered through an in-house car fleet which granted the company legal status to run share-riding services.
As of the end of 2014, UCAR recorded a net assets of -36.20 million RMB (-$56.88 million USD) with net loss hitting 38.20 million RMB, according to data released by Car Inc.
Along with the news, Car Inc. revealed that its substantial shareholder Hertz Holdings Netherlands plans to sell down its stake to 13.6 per cent from 16.1 per cent. Hertz will sell almost 60 million of Car Inc shares to an unidentified independent third party at HK$13.01 per share.
China’s ride-sharing market has saw skyward funding rounds this month. Uber China has secured a $1.2 billion USD funding boost from Baidu on September 8, while its direct rival Didi Chuxing confirmed a $3 billion USD round in the same week.
Image Credit: Shenzhou Zhuanche