Xiaolinggou, a new energy vehicle (NEV) rental unit of Chinese automaker Geely, has closed nearly 688 million yuan ($97 million) in a Series A round of financing as the parent company ramps up efforts to adopt a new rental model amid continued decline in China’s NEV sales since late 2019.
The venture completed the initial funding round after China’s policy-driven passenger NEV market posted a sales decline of 60.3 per cent in the first quarter of 2020 from the same period in 2019, following an over 30 per cent drop in H2 2019 due to Beijing’s sharp subsidy cuts, according to the China Association of Automobile Manufacturers (CAAM).
Xiaolinggou only named two investors in the Series A round: Ningbo Yincheng Group, a state-owned infrastructure developer in eastern China’s Ningbo City, Zhejiang Province, and Hangzhou Zhaopu, a little-known Internet company that provides automobile-related services and is wholly owned by Geely, per Chinese business data platform Tianyancha.
The company, which literally means “little nimble dog” in Chinese, bought out domestic electric vehicle firm Zuozhongyou in May 2020 after the previous acquisitions of two smaller players in 2018.
Hangzhou-based Zuozhongyou, founded in July 2013, is involved in the rental business of zero-emission, pure electric vehicles, as well as their management, require & maintenance, and provision of compatible charging facilities.
Geely’s NEV rental unit said in the post that it now operates 98,000 NEVs across over 800 branded direct-sale stores and franchised shops in more than 80 cities, serving an aggregate of 1.5 million users around the nation.
The startup will use proceeds from the Series A round to increase investment in building its intelligent systems and Internet of Vehicles (IoV), as well as to expand the application and commercialization of NEVs in various fields.
Meanwhile, it plans to strengthen cooperation with partners along the automobile industry chain in an attempt to speed up and optimize its supply chain capabilities.
The company has strategic cooperation with domestic automakers, such as BYD, BAIC Group, SAIC Motor, Anhui-based Chery Automobile, and electric vehicle brand Xpeng.