(Image Source: ZTO Express)
ZTO Freight, a less-than-a-truckload logistics unit owned by carrier giant ZTO Express, raised $300M in a recent Series B. The financing round featured both new and existing investors such as Sequoia Capital China, CDH Investments and Yunfeng Capital. The new capital will be used to boost R&D of its information system and increase recruitment, among other things.
Specializing in small-load logistics services, the Chinese startup has worked with several established clients including Alibaba and Tsingtao Brewery. Founded in 2016, the firm primarily operated in China before entering the Cambodian market starting from March 2020. According to Lai Meisong, Chairman & CEO of ZTO Express, “expanding market share” is “one of ZTO’s top priorities” as of today.
Furthermore, China’s delivery sector has greatly benefited from the rise of e-commerce in recent years. Between 2015 and 2020 alone, the country witnessed an increase in e-commerce turnout rate by 70.6%, with the number forecasted to reach 46 trillion yuan by 2025. “Volume and market share have been and will continue to be crucial to the growth and future of an express delivery business whose winning elements are scale and efficiency,” said Lai in a recent statement.