iCarsclub raises record US$60m Series B funding
It has drawn up expansion plans, though Asian govts' less-than-complete embrace of car-sharing is a blip
Singapore
SINGAPORE-based car-sharing app iCarsclub has raised a massive US$60 million in Series B funding, and says it is revving up for further expansion into Asia, though it still has a way to go before governments in the region embrace car-sharing and its benefits.
This second round of funding, which follows a US$10 million Series A one in June, came from new investors IDG Capital Partners and MorningSide Ventures. It is believed to be the highest Series B recorded in Singapore this year, overtaking mobile advertising startup AdNear's US$19 million in October, and approaching the US$65 million in Series C funds bagged recently by taxi-booking app GrabTaxi.
iCarsclub, founded in late 2012 as a platform that enables users to rent a car from nearby car owners who are not using their cars, has a presence in Singapore and 12 cities in China, among them Beijing, Shanghai, Guangzhou and Shenzhen.
Its co-founder and CEO Eddy Zhang told The Business Times: "With these funds, we plan to continue quickly expanding in China and improve operational efficiencies. We are confident we can overtake China's car rental giant CAR Inc...in terms of transactions . . . in the next two years."
He noted that iCarsclub has exponentially more locations in China and that its prices are 30 per cent lower than those of CAR Inc; iCarsclub's insurance experience and service are also superior to that of its Hong Kong-listed, Hertz-backed rival, he said. "With our insurance partner DirectAsia.com, we pioneered peer-to-peer car rental insurance... which offers drivers flexible hourly coverage while the car is in use. It lowers costs for drivers and provides maximum road protection."
This innovative plan has prompted PICC, one of China's largest insurance providers, to offer a similar plan, easing iCarsclub's growth into China, he said.
When asked whether Singapore was still an important market, Mr Zhang said: "Yes, iCarsclub will continue to be based here due to its strong branding and ability to attract top talent. The Singapore operations is a strong testament to investors and users in China. Also, we do have plans to expand to other Asian cities and Singapore is an excellent platform to enter other countries." But Singapore regulations continue to pose a challenge for car-sharing, he said, citing the Private Car Rental Scheme which lets private cars be rented out only on weekends and public holidays. The company's app is thus effective only on these days.
The startup said it is now in talks with the Land Transport Authority (LTA) to promote car-sharing as an alternative to car ownership.
LTA is also examining the scope for liberalising the Private Car Rental Scheme, Transport Minister Lui Tuck Yew said in a Committee of Supply debate last year.
Meanwhile, iCarsclub is on its way to becoming Singapore's first multi-billion dollar Internet startup, said Leslie Loh, the managing director of Red Dot Ventures, an early backer of the startup.
"Endorsement from blue-chip investors validates this potential. iCarsclub had 300 registered private cars when we invested in it 18 months ago.
"Today, it has more than 120,000 private cars. This new investment will ... consolidate its position as a category leader in this space."
Global consulting firm Roland Berger said China's market for short-term, self-drive car rentals alone will surge to US$10.6 billion by 2018, nearly double the 2013 levels.
