JD Capital’s Investee Shansong Raised USD 50 million in Series C Financing.

2017-02-06

At the beginning of the new year, Shansong, the largest intra-city delivery service platform in China, is going to announce its success of having raised USD 50 million in Series C financing.THQ九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

The fact that Shansong has managed to raise so much in spite of the sluggish venture capital investment situation shows that its business model and operation status are recognized by investors. The VC Fund of JD Capital invested in Shansong in 2015 as a lead investor in its Series B financing. THQ九鼎投资(600053.SH)_上交所私募股权投资领域上市公司


THQ九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

Leading business in intra-city fast delivery servicesTHQ九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

Founded in March 2014, Shansong now has almost 200,000 deliverymen who provide services for 23 million customers in more than 30 cities in China. THQ九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

Shansong is a pace-setter of intra-city delivery standards. It promises to deliver at the very minute customers want and guarantee a refund in case of a failure to deliver on time. Five kilometers would take 60 minutes to deliver and each another five kilometers would take another 30 minutes. But in fact, the services the company provides are far more efficient than it promises. Statistics show that in Beijing, the average delivery time of Shansong is only 45 minutes. THQ九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

Unlike normal express companies, Shansong does not have full-time deliverymen. Instead, it farms out its deliveries to part-time deliverymen who compete for orders on the platform. And the platform will use algorithm to choose one who can reach the receiver within the shortest time. Guided by the philosophy of “everybody can be a deliveryman”, Shansong, with adequate number of deliverymen, ensures standard and quality deliveries on the premise of strict evaluation and assessment. THQ九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

Now, Shansong is expanding its business scope. Large corporations and financial institutions with important documents to be delivered, high-end e-commerce businesses having high demand for time efficiency are major customers of the company. Sometimes, even celebrities choose Shansong to deliver their personal stuff.THQ九鼎投资(600053.SH)_上交所私募股权投资领域上市公司


THQ九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

Business of time investmentTHQ九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

With urbanization in full swing, Chinese cities keep expanding, and urban population continue concentrating. It takes more time to navigate in cities. As a result, there is a growing demand for professional intra-city delivery. Statistics show that in 2014, 14 billion parcels were delivered in China, among which 20% were intra-city deliveries. In the next few years, the number of parcels and the share of intra-city parcels will keep increasing. THQ九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

The essence of Shansong is actually time service. At present, consumption upgrade is driving more and more Chinese people to buy time with money. Shansong targets at medium and high-end customers who have rigid demand for intra-city delivery and ready to pay for time. However, the current model of delivery cannot meet the demand for urgent dispatches. If Shansong focuses on this kind of delivery, it has the opportunity to restructure the intra-city delivery model and further expand its business scope beyond urgent dispatches. THQ九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

Compared with its American counterpart Postmates, it took Shansong one third of the time Postmates needs to see the number of its daily orders to increase from 0 to 2,000. China has more cities with a population larger than one million than the US. And the metropolis have strong demand for fast delivery. Therefore, we can see that the intra-city delivery market in China enjoys robust growth.THQ九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

Since the second half of 2015, Shansong has maintained a month-on-month growth rate of over 50%. It began to profit in April 2016, making itself the first profiting sharing-economy company in the world. THQ九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

Venture capital is an important business area for JD Capital, and investing in Shansong is an important step JD Capital took in this area. After Shansong finishes a new series of financing, it will march at a faster pace towards becoming a unicorn company (startups valued more than USD 1 billion). And JD Capital will continue to work with the company to feel the pulse of “time economy” and seize the opportunity of “sharing economy”.THQ九鼎投资(600053.SH)_上交所私募股权投资领域上市公司


THQ九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

Appendix: Financing History of ShansongTHQ九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

May 2014, Series A financing finished, with CDH Investments participatedTHQ九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

July 2015, Series B financing finished, with JD Capital as the lead investor and Lighthouse Capital followed suit.THQ九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

August 2015, Series B+ financing finished, with Tiantu Capital participatedTHQ九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

February 2017, Series C financing finished, with SIG and YI Capital as lead investors and Prometheus Capital followed suit.THQ九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

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