Xiaodian, a Beijing-based power bank rental startup, on Monday announced it has secured RMB 350 million (USD 51 million) in Series B financing earlier this month. This latest financing round was led by Sequoia Capital and Banyan Capital. Existing investor Tencent also participated in this round of financing.
So far, Xiaodian has an all-star investor “cast” including its angel investors GSR Ventures and Wang Gang – both having invested in ride-hailing giant DiDi’s angel round.
Founded in 2016, Xiaodian offers paid smartphone charging services in places like shops and restaurants. A user scans a QR Code before getting his or her smartphone charged with a Xiaodian power bank at fixed locations. The company does not require deposits and sets the rental fee at RMB 1 (USD 0.14) per hour. The startup hopes to launch services in 25 Chinese cities by the end of this month.
Tang Yongbo, founder of Xiaodian, on Wednesday at a tech event in Beijing held by China’s tech website 36Kr predicted that the number of power banks available for rental will be enough to meet the needs of users in a few cities either by the end of this year or early next year.
“Expansion is not just about launching more power banks, we’re getting prepared to do better in supply chain, operation platform, and collaborative system inside the company,” said Tang.
Chen Hongliang, a partner at Vplus Venture Capital, is seeing the trend changing from providing products to offering services. He said on Wednesday that power bank rentals and other sharing economy sectors are offering services to users.
“The market for product makers today will be the same market size for service providers tomorrow,” he said.
From March to April 2017, the power bank rental sector saw more than RMB 300 million (USD 44 million) financing in just 10 days, according to Chinese investment website Pedaily.com.
There are two business models in China’s power bank rental sector represented by Xiaodian and Ankerbox respectively. Jumei, a cosmetics e-commerce giant which previously was listed on NASDAQ, on May 4 announced to purchase around 60 percent of stake in power bank rental startup Ankerbox for RMB 300 million (USD 44 million).
As previously reported by AllChinaTech, Ankerbox has power bank stations – which normally houses around 10 portable power banks – and enables users to take these power banks away from the stations. After paying a deposit via mobile payment, users can rent power banks by scanning the QR code. They can also use GPS to locate nearby power banks online.
As for the fixed power bank rental model, Xiaodian competes with the likes of Hidian, Xiaomi-backed Guaishou Chongdian, and Hema Chongdian.
(Top photo from Xiaodian.so)