Zhongrongjie Obtains CNY 2 Billion, Kicking Off Blockchain Program
The two-year-old electric battery manufacturer undertook a massive funding round, signing a strategic agreement on blockchain infrastructure development.
Last week was very special for electric-vehicle (EV) battery producer Zhongrongjie (中融界): the company received CNY 2 billion (USD 288 million) from Orient Capital (东方资本) on August 2. That was the first officially announced round of funding for the two-year-old firm.
On the same day, Zhongrongjie signed a strategic agreement with Huashang Fund (华商基金) on blockchain infrastructure development -- curiously enough as the company's main business is built around hardware.
Headquartered in Changsha, the capital of Hunan province, Zhongrongjie markets its products within a wide scope of verticals. It develops integrated solutions for automotive power batteries and charging piles. Besides, the firm is involved in EV charging station construction projects all across China.
Hunan province is among the most promising markets for the new energy vehicle companies in China. In terms of solvent household demand, it is in the same cluster with Anhui, Hebei and Hubei; the number of charging facilities in Hunan is more than twice lower than in each of these regions though.
Infrastructure is apparently an essential detail of the incipient EV ecosystem and there is a huge room for its development existing in Hunan province now. Zhongrongjie is well positioned and, now, well financed.
EV sector in China is lately on the upswing: in the last four years, EV-related ventures gained over CNY 135.6 billion (USD 19.54 billion) in venture funding. At the same time, battery manufacturers and charging facility builders nabbed around 20% of this amount.
However, the industry is facing a downtrend most recently: CNY 32.14 billion (USD 4.63 billion) was thrown into the sector in 2018, dropping from 2017's CNY 44.08 billion (USD 6.35 billion). This tendency is closely related to decline in amount of financing coming with government subsidies (read more about how investors and government brought up EV industry in China).