Nanjing-headquartered Zhongneng United, which offers rental of heavy machinery, announced on Tuesday on its website that it closed its Series C round consisting of equity and debt financing, raising a total of RMB 3 billion (USD 461 million).
Investors include Source Code Capital, Buhuo Ventures, state-controlled Shanghai Beigaoxin, and Hong Kong-based financial firm VSFG.
Zhongneng rents out overhead equipment such as forklifts and excavators, via its website and app, either from itself or third-party suppliers, and delivers the tools straight to the locations where they are needed. The company has served more than 50,000 corporate clients in 25 provinces and four municipality cities since its launch in 2016. The number marks a fivefold increase from two years ago when the firm closed its RMB 500 million Series B round.
Its clients include companies that have participated in the construction of Beijing’s second international airport, the Zhuhai-Hong Kong-Macao bridge, the National Speed Skating Hall that will be used for the 2022 Winter Olympic Games, as well as the express train station for the Xiong’an New Area in Hebei.
“Zhongneng has upgraded from a self-owned marketplace to an open platform covering a wider variety of machinery and enabling both dry-lease (equipment only) and wet-lease (equipment plus other services such as maintenance to ensure smooth operations) to large and medium-sized clients,” said Cao Yi, founding partner of Source Code Capital.
He added that Zhongneng integrated the whole life cycle of construction machinery, including circulation, leasing, and maintenance to increase the turnover efficiency and usage frequency, offering a comprehensive solution.
A representative of VSFG, which also invested in Didi and Airbnb, describes the company as “unique:” “As China is spending big on infrastructure construction, Zhongneng, which can flexibly allocate capital, equipment, and logistics resources, has greatly improved the construction efficiency of the whole country and created practical value.”
The spokesperson pointed out that Zhongneng donated and transported 46 sets of overhead equipment to the Leishenshan hospital in Wuhan last year, amid China’s effort to fight COVID-19, acting with “China speed.”
“China is the most active country worldwide in infrastructure construction so that the stock of machinery equipment is worth more than RMB 1 trillion (USD 155 billion), much larger than that in the US,” said Li Zhujie, founding partner of Buhuo Ventures.
Li added that Buhuo Ventures, which participated in all three financing rounds, believes that Zhongneng could surpass its US role model United Rentals to become the largest construction equipment rental platform globally.