Source Code Capital Portfolio Company YQN Logistics Closes Tens of Millions of Dollars in B2 Round, Existing Shareholder Source Code Capital Continues to Increase Stake

源码资本·February 20, 2019·0·0

China's leading one-stop international logistics service platform

On February 20, YQN Logistics — a leading one-stop international logistics service platform in China — announced that it had officially completed its Series B2 funding round of tens of millions of dollars. The round was led by global investment firm Coatue, with follow-on investments from existing shareholders Source Code Capital, DCM, and China Merchants Capital. Multiway Maritime served as the exclusive financial advisor.

Notably, this marks the second investment YQN Logistics has secured in just three months, following its Series B1 round from Sumitomo Corporation Equity Asia in November 2018.

YQN Logistics official website

According to reports, YQN Logistics launched in February 2015, offering comprehensive one-stop international logistics services including ocean freight, air freight, land transport, warehousing, customs brokerage, and insurance. The platform aims to leverage internet and digital technologies to create a visualized cross-border supply chain logistics service, making international shipping as convenient and efficient as sending and receiving express packages. Currently, the platform serves approximately 10,000 paying enterprise clients. Having previously completed four rounds of funding from Source Code Capital, DCM, China Merchants Capital, and Sumitomo Corporation Equity Asia, it has become one of China's largest shipping internet platforms in terms of user base and total capital raised.

YQN Logistics has established strategic partnerships with major shipping lines and logistics groups including COSCO Shipping Lines, Maersk Line, and Sinotrans Air Transportation Development, building out ocean and air freight networks from China to destinations worldwide. The company has also launched a series of innovative products such as Ocean FCL First Class, LCL First Class, and Air First Class, enabling online quoting, online booking, and online shipment tracking — significantly improving international logistics efficiency for enterprises.

As a veteran of the international logistics industry, YQN Logistics founder and CEO Shihao Zhou entered the field back in 2000. As early as 2005, he founded a traditional international freight forwarding company that became one of the top three players in the Shanghai market on the Central and South America trade lane.

"In our previous entrepreneurial experience, we discovered that the entire international logistics industry had very low levels of informatization," Zhou said. "Day-to-day quoting and order processing relied heavily on manual labor and was prone to errors. This meant low internal efficiency and an inability to provide shippers with consistent, reliable service."

"So we founded the YQN Logistics platform and recruited a team of R&D specialists from companies like Alibaba, Trip.com Group, and Tencent. We wanted to use technology to achieve digitalization, standardization, and visualization in international logistics. We believe algorithms can transform this industry!"

After more than four years of continuous refinement, YQN Logistics now processes over 500 orders per person per month — more than five times the industry average — Zhou noted.

Shihao Zhou, Founder & CEO of YQN Logistics

This funding round will be directed primarily toward upgrading the company's technology R&D capabilities and expanding its overseas service network. On the technology front, building upon existing features such as intelligent quoting, online booking, and logistics tracking, YQN Logistics will apply big data, artificial intelligence, and blockchain technologies to enable paperless documentation, automated order processing, and collaborative sharing between shippers and consignees. The platform will also open its systems to external partners through API interfaces, connecting upstream and downstream industry resources including ports, shipping lines, warehouses, trucking companies, customs brokers, freight forwarders, and cargo owners — breaking down data silos to build an end-to-end, fully intelligent cross-border logistics platform.

Building out overseas service networks has also been a priority for YQN Logistics in recent years. Beyond establishing its own branch offices at domestic ports including Shanghai, Ningbo, Shenzhen, Qingdao, and Tianjin, the company set up its Latin America headquarters in Mexico in 2018, successfully creating warehouse-to-warehouse international logistics services between China and Central/South America. In 2019, YQN Logistics plans to replicate this model in Vietnam, Thailand, Djibouti, the United States, and other countries — connecting with high-quality local logistics resources through its systems to enhance destination port service capabilities.

In recent years, shipping internet companies have been attracting significant investment with increasing frequency. Beyond China's YQN Logistics, Flexport in Silicon Valley completed a $100 million investment from SF Express, and Israel's Freightos secured $44.4 million in funding led by the Singapore Exchange. "Beyond the capital markets, players across the industry value chain — shipping lines, ports, customs authorities — are making frequent moves toward digitalization. With more participants joining in, we believe 2019 will be a year worth watching for digital transformation in the shipping industry," said Shihao Zhou, founder and CEO of YQN Logistics.