China’s Uber-Like Trucking Startup Mints The Country’s Latest Billionaire

Zhang Hui, the chief executive of Full Truck Alliance, is poised to join the world’s billionaire ranks as his company nears an initial public offering in the U.S.

The Guizhou-based startup, also known as Manbang in Chinese, is seeking to raise up to $1.57 billion by offering 82.5 million American Depositary Shares at $17 to $19 apiece, according to a filing with the U.S. Securities and Exchange Commission. The 42-year-old Zhang, who beneficially owns 15% of the company following the offering, would have a net worth of at least $1.7 billion, based on the lower end of the proposed range.

The company plans to use the proceeds to expand its service offerings, develop its infrastructure and technology innovation. Currently, Full Truck Alliance generates the majority of its revenue by brokering freight services across more than 300 Chinese cities. It matches shippers with nearby truckers through a smartphone app, and generates revenue from membership fees as well as brokerage charges that are based on the difference between the amounts collected from shippers and truckers.

Full Truck Alliance counts 1.3 million shippers and 2.8 million truckers, according to the prospectus. Last year, it generated $396 million in sales, and the company’s net loss widened to $532 million from $238 million in 2019. The company has raised billions of dollars in funding from investors including Tencent, SoftBank and Sequoia Capital China. Entities affiliated with SoftBank’s Vision Fund beneficially own just over 20% of the company, the prospectus shows.

Zhang has come a long way since first entering China’s fragmented logistics market in 2013, when pricing was often opaque and truck drivers could wait hours for orders. The former Alibaba executive founded trucking startup Yunmanman that year, and agreed to merge it with competitor Huochebang in 2017, ending a costly battle for market share as the novel services spent heavily to win more users.

The newly merged platform changed its name to Manbang, and was initially headed by Wang Gang, a backer of Yunmanman and an angel investor best known for his early investment in Chinese ride-sharing giant Didi Chuxing, which has also recently filed for an IPO in the U.S.

Zhang took over as CEO in late 2018, and became chairman in November 2020. Wang Gang is no longer listed among the company’s directors and executive officers in the company’s prospectus.

Full Truck Alliance still faces an uphill battle as it seeks a bigger slice of China’s logistics market. From tech giants Alibaba and Tencent to smaller startups like Huolala, logistics companies are all introducing new services and technologies to better connect shippers with truckers.

“Despite the strong volume growth, it has also come at the expense of lower pricing of its services, driven by greater price competition of logistics services in China.,” writes Douglas Kim, an independent analyst who publishes via research platform Smartkarma.