Shima Raises 300 Million RMB in Series C to Improve Mobility for 800 Million Rural Residents | FreeS Fund News

Recently, Shima, an internet company focused on rural transportation vehicles, announced the completion of a 300 million RMB Series C funding round. The round was co-led by Tongbanjie, China Growth Capital, and Hina Group, with Yixin New Finance Industry Investment Fund participating, and ChinaEquity Group making a follow-on investment. Previously, FreeS Fund led Shima's Series A round of tens of millions of dollars and continued to participate in subsequent Series B and B+ rounds.

Over the past three years, Shima has targeted the rural mobility market, focusing on two-wheeled electric vehicles, three-wheeled electric vehicles, and motorcycles, providing consumer finance and supply chain finance services to farmers and dealers. In its next three-year phase, Shima will launch a new strategic push into four-wheeled new energy vehicles, aiming to deeply penetrate the massive rural mobility market that affects 800 million people.

What the Investors Say

Zhao Zhiyuan, Vice President at FreeS Fund

Email: zzy@freesvc.com

Over the past three years, the Shima team has put down roots in rural China. Through outstanding channel control, innovative financial services, and strong brand support, they have built a solid foundation in the rural mobility sector. At the same time, the team has continued to innovate and expand its boundaries, beginning to make inroads into the low-speed four-wheeled vehicle market. We have been fortunate to witness Shima's continuous progress, and we believe the company will serve the vast potential of the rural mobility market even better in this new domain.

▲ Ning Rui, CEO of Shima Finance.

Recently, Shima — an internet company focused on rural transportation vehicles — announced the completion of its Series C round, totaling 300 million RMB. The round was co-led by Tongbanjie, China Growth Capital, and Hina Group, with Yixin New Finance Industry Investment Fund participating and ChinaEquity Group making a follow-on investment. This marks another major funding round for Shima within three years. Previously, the company raised a Series A of tens of millions of dollars led by FreeS Fund, a Series B of nearly 100 million RMB co-led by Shunwei Capital and Northern Light Venture Capital, and a Series B+ of nearly 100 million RMB led by ChinaEquity Group. This track record underscores Shima's appeal to investors.

Shima CEO Ning Rui said: "With the support of this Series C funding, Shima will launch a new strategic phase, expanding from two- and three-wheeled vehicles into four-wheeled vehicles, making a full push into the rural four-wheeled new energy mobility industry. We will continue to provide stable financial and capital support for the rural mobility market, enabling vertical and horizontal integration across the industry, better meeting rural consumption upgrade demands, and improving mobility for 800 million people."

Focused on Rural Mobility Scenarios: Building Industry-Finance Integration in Year One, Becoming a Segment Leader

Since its founding in 2015, Shima has targeted the rural mobility market, building deep vertical coverage across the entire rural transportation vehicle supply chain — from suppliers and brand manufacturers to retail endpoints. Starting with two- and three-wheeled electric vehicles and motorcycles, the company has continuously empowered the industry and developed a distinctive Shima-style risk control and consumer credit system: "traditional risk control as the foundation, big data as support, and channel capabilities as the safeguard." This system covers the full loan lifecycle — pre-loan, mid-loan, and post-loan management — and encompasses customer, dealer, and sales personnel management. With consumer finance and supply chain finance as its core business lines, Shima has built its first three-year phase of industry-finance integration, establishing a rural mobility strategic foundation based on a network of 50,000+ terminal outlets across counties, towns, and villages nationwide, and becoming a leader in its segment.

To date, Shima's business outlets cover 31 provinces and autonomous regions, more than 2,600 counties, and tens of thousands of townships. The company partners with nearly 100 vehicle brand manufacturers and well-known parts suppliers across the supply chain, including top players in each category: the top ten two-wheeled electric vehicle brands (such as Yadea, Sunra, and Sundiro), top five three-wheeled vehicle brands (such as Jinpeng, Zongshen, and Huaihai), top five motorcycle brands (such as Haojue, Sundiro Honda, and Wuyang Honda), top five low-speed four-wheeled vehicle brands (such as Lichi, Yujie, and Jinpeng), and major parts suppliers represented by Chaowei Battery. By early 2018, Shima's cumulative transaction volume approached 10 billion RMB, maximizing its ability to meet the vehicle financing needs of millions of consumers.

Targeting the Rural Four-Wheeled New Energy Mobility Market, Building Diversified Moats, Capturing the Trillion-RMB Opportunity

In its second three-year phase, Shima will leverage its proven playbook and ecosystem map to go deeper into the industry, expanding from two- and three-wheeled electric vehicles and motorcycles into four-wheeled new energy mobility categories. It will build diversified moats by layering channel, finance, industry, and customer base advantages, upgrading from strong-channel financial services to full-channel, full-chain, full-spectrum integrated services. While deepening industry-finance integration across the supply chain, the company will deeply penetrate the massive rural mobility market. It will also increase capital investment to better help the mobility industry upgrade and enable more rural users to achieve consumption upgrades.

Data shows: "China's rural mobility market is booming, with a trillion-RMB consumption market waiting to be developed." After more than a decade of explosive car consumption, first- and second-tier cities have seen saturation in vehicle ownership. Combined with restrictions on driving and purchasing, car sales growth has slowed dramatically and per-capita ownership levels have declined. China's car consumption is rapidly shifting from first- and second-tier cities to rural markets. China's rural population is nearly 800 million, accounting for 46.3% of the total population, with household car ownership rates of only 10-20%. In 2017, rural residents' per capita disposable income reached 13,000 RMB, up 7.3% year-over-year. As farmers' income structures and living standards improve, massive market scale will inevitably emerge. Moreover, the existing stock of low-speed mobility users in rural areas is approximately 250 million — an ideal customer base for upgrades and replacements. Statistics show that rural households own more than 70-80 electric vehicles or motorcycles per 100 households, and more than 10 tractors per 100 households. If these upgrade and replacement cycles materialize, market potential will be even greater.

Four-wheeled new energy vehicles have natural advantages in future rural purchases and upgrades. First, most rural users have independent parking spaces (courtyards, garages, etc.) and independent power sources, making charging convenient. Second, rural users generally have modest requirements for range and top speed, and compared to fuel vehicles, electric vehicles have lower operating costs and easier maintenance — all of which align well with rural consumer psychology. Combined with favorable national policies, more and more rural residents are willing to choose or at least try new energy vehicles as their family's future mobility tool.

Thus, the upgrade in mobility demand will inevitably catalyze a massive rural car market — this is the primary reason Shima is bullish on rural mobility. For the coming three years, Shima will leverage its competitive moats to fully support industry upgrades and user consumption upgrades. Shima's original mission remains unchanged: "We want to do one thing well — rural mobility — and improve the happiness index of 800 million people's travel, moving them from wanting to travel to enjoying travel."