Yunnan Metropolitan Construction Investment Group Co., Ltd. (YMCI Group), a state-owned investments entity, has made a RMB500 million (US$73 million) strategic investment in Wukong Zuche, a Beijing-based car rental start-up focused on the tourism sector.
YMCI will provide the company RMB215 million (US$31 million) in equity investment and RMB250 million (US$37 million) in secured loans. The investment is part of YMCI’s plans to invest a total of RMB2 billion (US$290 million) in Wukong Zuche’s car rental services designed for the tourism sector, according to a company announcement.
The overall market size of car rental and sharing in China is expected to grow to RMB380 billion (US$56 billion) in 2018. Currently, Didi Chuxing, Car Inc. and eHi Car Services are the largest players in this market. Wukong Zuche is a new generation-car rental company providing a differentiated product by integrating tens of thousand small and medium-sized taxi companies across China.
Wukong also focuses on creating a seamless experience for travelers that combine the freedom of driving a rental car with tourism services such as local tours. Its rental car users enjoy flexible return locations, with some rental cars equipped to handle different terrain such as deserts and mountain roads.
The company previously raised a series A round worth tens of million RMB from Zhen Fund, Bojiang Capital Management Group, Chinese venture capital firm PurpleSky and Jinke Junchuang in June 2016. One year earlier, it received RMB15 million (US$2.2 million) in a pre-A round from Jinke Junchuang and PurpleSky. It plans to use the latest proceeds to expand its business to provide services in all major cities in China.