Full Truck Alliance raises $1.7bn as Uber meets Silk Road

Full Truck Alliance, the Chinese ground transport ‘Uber-for-trucks’ online platform, announced earlier today that it has raised a further $1.7bn as it prepares for an IPO next year.

One of a new breed of B2B smart platforms that specialises in matching truck drivers with shippers, Full Truck Alliance had already attracted funding from several blue-chip backers including SoftBank, Tencent, Sequoia and Alphabet’s CapitalG. They have now been joined by Vision Fund, Permira and Fidelity and several others. A spokesman for the company (known as Manbang in China) said that the money would be spent on scientific, service and model innovations and to expand into same-city deliveries, as well as to extend its ground transport network.

As the name suggests, Full Truck Alliance was formed through the merger of two existing truck-sharing platforms and already has over ten million (mainly independent) registered drivers and approximately five million shippers. It is generally acknowledged to have improved the efficiency of China’s logistics industry by applying ride-sharing technology to the sector’s more conventional trucking model.

China's President Xi Jinping

Although China’s own booming domestic economy suggests that a bet on the Full Truck Alliance is a relatively safe one, there is a cloud on the horizon. That is the sustainability of Beijing’s future financial commitment to the Belt and Road, President Xi’s multi-billion dollar project to extend China’s soft power by reviving the ancient East-West trade route. Xi used last week’s Asia-Pacific Economic Cooperation (Apec) forum to affirm China’s commitment to this his signature initiative, but analysts are beginning to suggest that domestic debt concerns may force him to cut back on overseas lending.

According to a recent report from the Institute of International Finance (IIF), China’s non-financial corporate debt reached 165% of GDP in the third quarter of 2020. Now, thanks in part to COVID-19, many of the 50 developing countries that have enjoyed a slice of the estimated $300 billion that China has pumped into nearly 1,600 projects since Xi launched the Belt and Road back in 2014, are in an even worse financial state than their creditor. That could curtail any plans Full Truck Alliance may harbour for further international expansion.