Chinese car-sharing platform TOGO announced a US$ tens of millions Series B2 round led by SIG with participation from ZhenFund, Crescent Point, local Chinese media reports.
The company has raised more than US$72 million (RMB500 million) in a total of five rounds of financing since founded in 2015.
TOGO operates a model that is similar to bike sharing firms Mobike or Ofo, the difference here is, instead of pedalling a bicycle, you are renting a car to drive around with TOGO.
Use of the TOGO is quite easy, users download its app, using LBS (location-based services) technology to locate the nearest available car, unlocking the car via the app and just driving away. Users don’t have to return the car to a designated area which makes it an even more convenient experience.
The company currently has operations in Chinese higher-tier cities including Beijing, Shanghai, Guangzhou, Shenzhen and Xi’an. It’s fleets consisted of cars including BMW Mini, Mercedez-Benz Smart, Audi A3, Jeep Renegade. etc.
The company claims that it has already turned a profit in Beijing, while in Shenzhen and Xi’an, about to break even.
Conventional wisdom holds that, the car-sharing business is beleaguered by the profitability dilemma due to factors like asset- and operation-heavy, longer ROI cycle, etc.
That said, the company’s CEO, WANG Lifeng, believes that, the key to profitability is the scale. TOGO operates a fleet of at least 1,000 cars in cities it has a presence. Additionally, the firm taps technologies such as IoV (Internet of vehicles) and AI to ensure a more efficient utilisation of the fleet, resulting in higher utilisation rate.
He believes that, once users changed their “car ownership” mindset after getting used to car-sharing services, his company might be looking at a hundreds of billions market in China.
Editor: Ben Jiang