Shenma Chuxing, an electric car trading platform based out of China, recently fundraised $20 million during a Series A financing round primarily led by the capital firm Frees Fund and the South Korean KTB Ventures.
These new funds are coming in a third round of financing just in the past half a year and was finished at the beginning of 2019.
The company expects to use this money to consolidate their supply chain, improve their back and middle office function, expand their team, and upgrade some of the company's technology.
Shenma has already been funded by companies like RedAvenue and their previous two funding rounds have raised around $15 million.
Currently the company boasts their network is already in place in over 200 cities, in 28 provinces, throughout China with over 300 retail locations containing over 20,000 electric cars. They also are developing an online SaaS management system to help combine their offline network with their online network.
The company has their sights set on the third to sixth tier markets, using their sales outlets and data to push electric vehicles into the middle and lower markets within China. Shenma has stated that reserving cars to only the top markets isn't fair and with wealth concentrating in underdeveloped regions selling electric cars to lower markets holds potential.
During last year, around 22 million new vehicles were sold, but only around 5% were alternative energy cars. Shenma believes that alternative energy cars will be boosted up to around 30% of new sales by 2028.
"Shenma has a very deep understanding and experience in the new energy vehicle market channel and OMO retail model, as well as the Internet + trend in personal Mobility. Shenma has provided a whole set of solutions from supply chain to SaaS system, financial services and operation management to optimize the industrial chain," commented Amy Yeh, Managing Partner at KTB Ventures.
Founding Partner of Frees Fund, Feng Li, stated that Shenma is one of the first companies to focus on lower markets outside of the biggest cities which, along with government policies pushing electric cars, should change the how the industry is structured and behaves.
KTB Investment oversees assets of around $15 billion and has been focused on the Chinese market for a decade, investing in companies like Mindray Medical, Youku, Focus Media, and Clobotics.