Reuters logo
HK's GOGOVAN, China's 58 Suyun follow merger with $200 mln fundraising
August 31, 2017 / 10:57 AM / 22 days ago

HK's GOGOVAN, China's 58 Suyun follow merger with $200 mln fundraising

HONG KONG, Aug 31 (Reuters) - The $1 billion logistics firm emerging from a marriage of Hong Kong startup GOGOVAN and Chinese peer 58 Suyun aims to raise up to $200 million selling shares to strategic investors to help fund expansion, GOGOVAN’s founder said in an interview.

The pair, which announced a merger on Monday, is talking to international investors with expertise in target markets of China, Japan and Southeast Asia to raise at least $150 million, said Steven Lam, who will be chief executive of the merged firm.

“Anyone that can help our business (beyond extending funds) will be very interesting for us to talk to,” Lam said.

Logistics companies region-wide are benefiting from an e-commerce boom, particularly in China, that is spurring demand for delivery services.

GOGOVAN offers intra-city delivery in eight Chinese cities for large businesses and operates in a similar manner to ride-hailing firms such as Uber Technologies Inc, charging fees through an app which connects customers and van drivers.

58 Suyun is the freight division of 58 Home, a subsidiary of New York-listed 58.com Inc. It focuses more on smaller firms and individuals in over 40 cities.

58 Home will own the majority of the merged entity, bringing together backers including internet firms Tencent Holdings Ltd and Alibaba Group Holding Ltd, and private equity investors KKR & Co LP and New Horizon Capital.

“It’s not about maximizing value. More importantly, for them, is getting the right investor base” in the new funding round, said Jeremy Choy, head of mergers and acquisitions at China Renaissance, which advised both parties in the merger.

The new company may seek a stock exchange listing in about two years, applying as early as 2018, said chairman designate Chen Xiaohua, who is also CEO of 58 Home.

“From a qualification standpoint, next year we can start with the filing, but it will depend on the board,” Chen said.

The first step for the combined entity is to run GOGOVAN services in cities where 58 Suyun operates, and expand combined coverage to 100 cities in the coming 12 months.

“In the long run we want to build this company as the number one internal logistics company in China,” Lam said. “That means we cover every single city in the next two or three years.” (Reporting by Elzio Barreto and Julie Zhu; Editing by Christopher Cushing)

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below