Kali (卡力互联) has officially announced the completion of its Series A funding, collecting over CNY 100 million, led by Sino-Ocean (远洋资本). This round of financing has seen participation from Zimi Fund (子米投资) and FengWang investment (蜂王投资), with China Renaissance (华兴资本) acting as its financial advisor.
Founded by Meng Bihui (孟碧辉) back in 2017, Kali aims to increase the efficiency of road freight, through its ‘logistics + internet’ scheme to integrate high-quality transportation resources for small and medium-sized logistics. The company is adhering to its core value of providing better transportation management processes and customer experiences by continually reducing logistics costs for customers.
The company currently is currently focusing on three major business sectors, including truck cargo transportation, integrated one-stop ecosystem for truck after-markets, and logistics financial services.
It is confirmed that this round of financing will be distributed among three areas:
- Consolidation of its underlying businesses by laying a solid foundation for G9 integration (among the nine renowned logistics entities in China), expand the vehicle transportation network and launch the national ‘GX strategy’ to attract more carriers to the platform.
- Upgrading and iterating its intelligent system through improving its offline management, to achieve DT-driven decision making and management capabilities.
- Strengthening the talent pool and team building.
According to a report published by Bain, China road freight is still considered inefficient and expensive compared to that of the EU and US. China’s logistics cost as a percentage of GDP lags far behind from the average of developed countries, at 10% and 16% respectively, and it is estimated that there is still 30-50% room for improvement in terms of driving efficiency.
Due to this, many innovative logistics tech startups in China have emerged at a rapid pace, seeking to transform the industry. Manbang (满帮), a joint venture between Huochebang (货车帮) and Yunmanman (运满满), rose to be one that is disrupting the industry. Unlike Kali, the Uber-like Manbang connects companies to independent drivers, who make up 90% of all commercial trucks in China. The truck-hailing company has also introduced a self-driving fleet.
One of its global counterparts, which is taking advantage of the potential of the freight industry is Convoy, which was just recently attained the status of unicorn. The Alphabet-backed company provides both aims to elevate the freight brokerage system in the US by eliminating middle-man, through its free mobile platform. Other companies include Einride, Transfix and Embark.
Road freight is probably the most crucial mode of cargo transportation in China. China’s total freight volume in 2018 amounted to 51.46 million tons, of which road freight represented 77%, or equivalent to 39.59 million tons, with a year-on-year increase of 7.38%. In the first two quarters of 2019, the figure reached over to 22.6 billion tons.
Road cargo turnover has also seen a positive outlook, reaching 4,454.4 billion tons-kilometers in the first 8 months of 2018, with a year-on-year increase of 6.3%. With innovative technology being continuously introduced, the industry will accelerate into the future.