White van man. Photo credit: skohlmann.
With the aim of more than doubling its market presence during the course of 2017, Uber for vans startup Lalamove this afternoon announced it has secured US$30 million from investors. Xianghe Capital, a relatively new firm, led the round, while Blackhole Capital and previous investors MindWorks Ventures and Crystal Stream contributed.
It dwarfs the US$10 million the service – dubbed EasyVan in Hong Kong, Huolala in mainland China, and Lalamove everywhere else – pocketed in May last year.
Now active in 40 cities in mainland China, plus Hong Kong, Taipei, Singapore, Bangkok, and Manila, Lalamove wants to be in 100 cities by the end of the year, says Blake Larson, head of international at the Hong Kong-based startup.
Chinese recipe
“There are lots of huge cities in China. Up to 150 cities are big enough to sustain the model,” he tells Tech in Asia. Lalamove operates by signing up van drivers to do deliveries for its corporate clients. Then, like Uber, it takes a cut of the fare.
Shing Chow, Lalamove’s CEO. He founded it in 2013. Photo credit: Lalamove.
Much of the expansion will happen in mainland China rather than Southeast Asia because it’s easier, says Blake – no extra language barriers, no new laws and regulations to master. The startup is already profitable in five or six Chinese cities.
The market in China alone is worth an estimated US$1.7 trillion.
“It’s fairly easy to scale once we found out what the recipe is,” says Blake of the notoriously tricky mainland China market. The tasty recipe, he says, was not to offer subsidies to customers, instead focusing on making the business “really lean.” Then the team watched a war of attrition among “hundreds” of similar services as they all bankrupted each other with deep discounts.
“Now there’s just two of us,” he says, name-checking main Chinese rival Wuba, a spin-off from classifieds site 58.com.
They’re after what Shing Chow, Lalamove founder and CEO, sees as “a big market” for logistics across Asia, worth an estimated US$1.7 trillion in China alone.
Lalamove now has 500,000 drivers – covering vans, trucks, and motorcycles – signed up to its platform, who’ve collectively made 15 million deliveries. Across the continent, its biggest competition comes from Gogovan and Ninjavan – the latter got US$30 million of its own last April.
Lalamove’s most recent expansion was last month into Manila, the traffic-jammed capital of the Philippines. Over in Thailand it’s using scooters to run local deliveries for Line, the popular messaging app, as it experiments with online shopping.
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