Selling oil to businesses in China is big business for e-commerce company Shanghai Zhaoyou Technology Co. Ltd., which is in the process of raising a Series C funding round of $150 million.
The company, which is generally known as Zhaoyou, says the first part of this funding effort, which it calls C1, is complete, with the C2 round underway. It did not say how much was raised in the C1 round.
Zhaoyou, which means “find oil” in Chinese, previously has raised $58 million from investors including Susquehanna International Group, which is headquartered in Philadelphia, and GGV Capital, a venture capital firm based in Silicon Valley and China.
The company sells through its e-commerce site Zhaoyou Mall at 51zhaoyou.com and its “I need diesel” mobile app. Sales surpassed 5 billion yuan ($786 million) in 2017, and the company projected 2018 sales of 20 billion yuan ($3.15 billion) in 2018.
“For business users, there are many more consuming scenarios for diesel than gasoline,” says Lu Jian, Zhaoyou’s founder, regarding selling diesel fuel gasoline to businesses. “Trucks, construction machines and power equipments all need diesel to work. It is a more than 1 trillion yuan ($160 billion) market.”
Zhaoyou Mall is designed for larger customers that are buying to fill their own fuel tanks. The company says the average ticket value of Zhaoyou Mall is 100,000 yuan ($15,728).
The “I need diesel” app targets small companies that are seeking the lowest-cost fuel for their trucks on the road. The average order through the app is about 2,000 yuan ($315) per order, and Zhaoyou says it typically saves customers 15% per order. The app also helps customers find the nearest Zhaoyou service station. The company operates 600 fueling stations in 45 cities in China.
Zhaoyou says it has 12 fuel suppliers, including Royal Dutch Shell plc, ExxonMobile Corp. and China Petroleum & Chemical Corporation.
Founded in 2015, Zhaoyou says it has been profitable since 2016.
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