The firm kept a staggering funding record since it closed USD 50 million Series B funding this April. It attracted CNY 1.5 billion (USD 218 million) in VC and strategic fundings so far this year.
Several cranes above the buildings. Image Credit: EJ Yao/Unsplash
China’s leading overhead equipment rental company Zhongneng United (众能联合) announced a new CNY 1 billion (USD 145 million) injection from several strategic investors and CNY 150 million (USD 22 million) Series B+ round of funding led by Nanjing-based Five Star Holdings today.
State-owned Industrial and Commercial Bank of China, China Merchants Bank and Bank of Jiangsu involved in the strategic investment. The firm kept a staggering funding record since it closed USD 50 million Series B funding this April. It attracted CNY 1.5 billion (USD 218 million) in VC and strategic fundings so far this year, according to the company.
“As Source Code Capital’s representative target in the industry internet direction, Zhongneng United rides on the wave of urbanization and industrialization, the appearance of Lewis turning point in China, and Smart Plus trends. It will become a global equipment rental leader. ” Zhongneng’s early investor Source Code Capital’s executive Wang Xingshi said.
Zhongneng’s counterpart NYSE-listed United Rentals, Inc. (URI: NYSE), is valued at around USD 10 billion and trading at a multiple of 6.25 times earnings on July 29. Founded in 2016, Zhongneng has been backed by Venture Capitals. Nanjing realized its importance in improving productivity and operational efficiency of industrials, a goal that Beijing preaches.
Zhongneng has built up 60 distribution centers to provide warehouse, logistics and serving services, with the fleet of 10,000 trucks. Its sales channel covers 179 cities in China. Cooperated with aerial work platform (AWP) equipment providers like JLC, Haulotte, Sinoboom, and LGMG, the firm aims at providing comprehensive rental solutions for its enterprise clients.
In China’s aerial work platform rental market, there are a lot of greenfield opportunities are out there. Historically, the penetration of AWP has been far higher in the U.S. than in China, suggested by the U.S adopts 2.89 aerial work platforms to generate USD 100 million GDP while China only adopts 0.36. The market is growing at a 25% CAGR from 2005 to 2011, according to Essence Securities, showing potential. Zhongneng experiences such favorable conditions. It recorded over 300% annual growth of adding AWPs in the past, suggested by its partner JLC.