According to a LatePost report on Thursday, T3 Travel is about to complete its latest round of financing, including equity financing of more than 5 billion yuan ($755 million). This financing round is led by CITIC Group and followed by previous shareholders. The company has also obtained a credit line exceeding RMB 2 billion.
Launched in July 2019, T3 Travel is headquartered in Nanjing. The company was originally established by three state-owned automobile manufacturers, FAW, Dongfeng and Changan Automobile, along with investment from Internet giants such as Alibaba and Tencent.
The average daily number of T3 Travel’s orders in August is about 1.2-1.5 million, which is significantly higher than the 700,000-800,000 orders at the end of last year. As for the total number of orders, the figures of Didi, Gaode and Meituan are about 20 million, 5 million and 1.2 million respectively.
In the case of the original business model for which T3 Travel applied, the platform was responsible for providing vehicles as well as the strict screening and training of drivers, so as to ensure compliance with safety standards. However, the asset-heavy model cannot expand rapidly, and the platform scale will be limited. From 2021, T3 Travel will allow drivers to join.
The expansion strategy of T3 travel is to take root in a few cities first. According to their tentative plan, about a year after having entered a city, the market share can reach 20%-30%. By the end of this year, the number of cities that T3 Travel stations in nationwide will only reach 48, far less than Gaode, which currently covers more than 300 cities.
T3 Travel had previously proposed to achieve a goal of 3 million orders per day in its business operations by the end of 2021. After securing the latest round of financing, T3 Travel may launch a new attack on the market. One industry source said that the end of the year is usually the peak period of online car travel. According to past experience, at the end of the year, T3’s subsidy will also be greater.
On September 1, the Ministry of Transport, together with the Cyberspace Administration of China (CAC) Office, the Ministry of Industry and Information Technology, the Ministry of Public Security, the State State Administration for Market Regulation and other departments, requested a stop vicious competition and a self-examination of violations. T3 Travel ranked first on that list. Regulators now require that online ride-hailing platform needs to obtain a network car business license in various places. Moreover, drivers need to hold the appropriate licenses that pertain to bookings made over the internet.
At the beginning of July, Didi Chuxing was reviewed and an entire series of applications were removed. The impact trickled through to other companies in the same industry. On September 6, Caocao Chuxing announced the completion of its B Round of financing worth RMB 3.8 billion with its investors mainly coming from state-owned enterprises.