Chinese internet of things (IoT) enabled automobile services start-up Mogu Zhixing has secured a US$120 million series A round of financing led by the country’s social media and gaming magnate Tencent, shows information updated on Chinese business data platform Tianyancha on Friday.
Other investors, including Chinese e-commerce giant JD.com and Bertelsmann Asia Investments (BAI), a wholly-owned investment vehicle of global media, education and services mogul Bertelsmann, also participated in the new round.
The investment comes as research and advisory firm Gartner estimates that the number of connected cars — cars equipped with internet access — will reach nearly 250 million worldwide by the end of 2020. The market scale of Chinese connected cars is projected to hit US$216.2 billion by 2025, taking up a quarter of the global market scale, as per a research conducted by management consulting firm Accenture.
Mogu Zhixing is a software as a service (SaaS) connected cars platform launched in November 2017 by a Chinese company whose name can be translated as "Zhidao Network Technology Co." Leveraging its "hardware plus operating system plus application" service model, the company primarily provides a range of services like locating and tracking vehicles, generating traveling data and searching for car maintenance.
"In recent years, the technology and automobile industries are both thinking about how to make cars more intelligent. This is what inspired me to set up the company," said Zhu Lei, founder and CEO of Zhidao Network, cited by Chinese technology news portal 36Kr. "The core of technological development is to better serve consumers and to add more value to the industry."
Proceeds from the new round will be used in the research and development of new products, and the boost of large-scale application of its integrated software and hardware solutions.