China’s ‘Uber for trucks’ to IPO in the U.S. at $30 billion valuation

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  • In China, the company is known as the “Didi of Trucks,” a nod to the famous ride-hailing giant that forced Uber to retreat from China. FTA’s dominance was established in 2017 out of a merger between the two largest freight-sharing platforms, Yunmanman (运满满) and Huochebang (货车帮).
  • In addition to freight logistics, the company also provides financial services to trucking drivers, including vehicle insurance, loans, and top-up toll cards, among others.
  • At the end of last year, its platform was used by 5 million shippers and 10 million truck drivers across 338 cities. There are a total of 18 million truck drivers across the country, so about half the industry is already on the app.

FTA’s former CEO, Wáng Gāng 王刚, is a well-known figure in ride-sharing and logistics circles, and he is said to be the very creator of the ride-hailing app concept in China along with Chéng Wéi 程维, the founder of Didi Chuxing. He began his climb to stardom as an early investor in Didi in 2012. Wang then gave Yunmanman its first boost as an angel investor in 2013.

  • At Didi, Wang was more than an investor. In addition to shaping Didi’s flagship business model, he was also known to be a strong proponent of market consolidation, backing the famous merger between Didi and Kuaidi, which consolidated the industry’s two largest players.
  • In February 2019, Wang stepped down as CEO and handed over management to Zhāng Huī 张晖, the former CEO of Yunmanman.

China has one of the world’s largest and fastest-growing logistics markets. It grew from $300 billion in 2001 to $2 trillion in 2018, according to McKinsey.

  • Even a 2% transaction fee on each truck ride would yield around $10 billion in revenues, said one of FTA’s investors (in Chinese).
  • More than 70% of the 47 billion tons (in Chinese) of goods transported in 2019 was delivered by land, according to China’s National Bureau of Statistics.
  • In 20 years, China has modernized its transport infrastructure faster than any country in history. It has built new superhighways, high-speed trains, airports, and seaports, laying the foundation for its fast-growing logistics industry.

Nevertheless, there is still no dominant logistics player in China, although both FTA and Didi — which began its own freight logistics arm last year — are seeking the crown. That means the two biggest investments of Wang’s career will likely face a showdown in the next few years.

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