Shansong Express, a Chinese intra-city express delivery service, also known as FlashEx, has secured US$60 million in a series D-1 funding round that valued the startup at over US$1 billion, making it the latest entrant to the so-called unicorn club.
The latest funding for the four-year-old firm was led by N5 Capital, V Star Capital, and Shihaisong Capital. Other participating investors include BHG Long Hills Capital, Hearst Ventures, Lighthouse Venture Capital, SIG China, and Shunwei Capital, a venture capital firm co-founded by Xiaomi founder Lei Jun, according to an announcement from Shansong Express.
As an innovation in the mainland logistics sector in recent years, flash delivery services are prospering in many metros, offering faster and more cost-effective package conveyance in a number of urban locations within a city.
Launched in 2014, Shansong Express specializes in the so-called “To-Customer (2C)” delivery services amid the growing digitalization of domestic city services, which guarantees a 60-minute delivery time to destinations within five kilometers of the collection point.
Operating via the popular messaging platform WeChat, Shansong allows users to submit the delivery information like pickup address, recipient’s address, the nature of the goods to be carried and any specific delivery requirements via the messaging platform. Then Shansong will work out the delivery fee and time based on the distance involved and the weight of the goods. Users can also place their orders on Shansong’s website or mobile application.
Once a WeChat payment has been completed, the order would be initiated, and individual couriers, called “FlashRiders”, nearby the dispatch point can bid for delivery assignments in real time.
Shansong’s FlashRiders now provide various kinds of delivery services for individual customers such as “purchase and delivery”, with the delivery items ranging from documents, flowers, foods, gadgets, groceries, medicines, and even keys.
In addition, Shangsong fixes the timing for the various stages of the process, such as ordering in an average of 1 minute, initial pick-up in 10 minutes, and 60 minutes for intra-city delivery. The service is provided on a 24-hour basis.
According to a report on the Chinese tech news site 36Kr, Shansong’s customer base has exceeded 100 million from 222 cities it is operating across the country, with its number of FlashRiders reaching 480,000.
The company broke even in 2016 and maintained an average annual growth rate of over 300 percent in its customer base each year.
China has seen a fast-growing market for local delivery services in recent years. While logistics giants like SF Express are dominating the major “To-Business (2B)” market, more startups, such as Meituan Dianping, are emerging in new segments like food delivery services to individual customers.
In April this year, e-commerce giant Alibaba Group acquired full control of Ele.me, a major platform in China’s food delivery market, as it competes with Tencent-backed Meituan services for offline consumers.
In May, Alibaba and its logistic arm Cainiao Network invested US$1.38 billion in domestic logistics company ZTO Express. And in July, Cainiao invested US$290 million in Hangzhou-based Dianwoda, in a deal that would result in the two parties cooperating in warehousing and intra-city delivery.
Aside from Shansong, similar app-based instant delivery services are now offered by rivals like RRKD Express and Ekuaisong.
– Contact us at [email protected]