Cargo Lala updated its Hong Kong stock prospectus, gathering well-known capital such as Gao Wei, Sequoia, and Shunwei, the world's largest logistics trading platform

獨角獸早知道 ·  Apr 3 10:24

Source: Unicorns Always Knew
Author: iponews studio

According to the Hong Kong Stock Exchange's disclosure on April 2, Lala Technology Holdings Co., Ltd. submitted a listing application to the main board of the Hong Kong Stock Exchange, and Goldman Sachs, Bank of America Securities and J.P. Morgan Chase acted as co-sponsors.

According to the prospectus, Cargo Lala is a leading technology-enabled and data-driven logistics trading platform with operations all over the world. Since its establishment, the company has used “Lalamove” as its brand name and is committed to making it synonymous with “smart logistics.”

According to Frost & Sullivan, Cargo Lala is the logistics trading platform with the largest global total value of closed-loop freight transactions (or closed-loop freight GTV) in the first half of 2023, with a market share of 44.0%; the largest logistics trading platform for global closed-loop freight GTV in the first half of 2023; the largest logistics trading platform for global average monthly active merchants in the first half of 2023; and the logistics trading platform with the largest number of completed orders in the world in the first half of 2023.

In 2023, the Cargo Lala platform facilitated more than 588 million completed orders, and global freight GTV reached US$8.736 billion. In 2023, the company had an average of 13.4 million monthly active merchants and an average of 1.2 million monthly active drivers.

Cargo Lala was founded in Hong Kong, China in 2013, and expanded into mainland China and Southeast Asia in 2014. According to Frost & Sullivan, in the first half of 2023, according to closed-loop freight GTV, the company's market share in mainland China was 61.0%. Since 2014, Cargo Lala's operations have expanded to other cities in mainland China and Southeast Asia, as well as other overseas markets such as Latin America.

As of December 31, 2023, Cargo Lala's business spread across 11 markets and more than 400 cities around the world, namely mainland China, Hong Kong, Thailand, the Philippines, Singapore, Indonesia, Vietnam, Malaysia, Mexico, Brazil and Bangladesh. In 2023, revenue from overseas markets accounted for 8.8% of total revenue.

According to the prospectus, since its establishment, Cargo Lala's operating and financial indicators have grown significantly. The company's global GTV increased from US$6.763 billion in 2021 to US$9.414 billion in 2023, with a CAGR of 18.0%.

Specifically, in 2023, Cargo Lala's global GTV was US$9.414 billion, up 28.8% year-on-year from 2022. The company's revenue increased from US$845 million in 2021 to US$1,334 million in 2023, with a CAGR of 25.7%. In 2021 and 2022, the company generated adjusted losses (non-IFRS measured) of USD 651 million and USD 12.1 million, respectively, while recorded adjusted profit (non-IFRS) of USD 391 million in 2023.

Cargo Lala's gross profit increased 67.0% from US$333 million in 2021 to US$556 million in 2022, mainly due to the increase in the company's revenue rate of freight platform services in mainland China from 7.6% in 2021 to 9.7% in 2022, and the reduction in the size of the local operation team to improve operating efficiency, and lower wages and related expenses, leading to an increase in gross profit generated from mainland China.

The company's gross profit further increased by 47.0% to US$817 million in 2023, mainly due to an increase in gross profit from mainland China, which stemmed from the increase in the company's freight platform service revenue of 37.6% from US$566 million in 2022 to US$779 million in 2023 due to increased demand for freight services after COVID-19 recovery, and freight platform service costs increased slightly by 4.0% from US$145 million in 2022 to US$151 million in 2023, far exceeding the increase in revenue.

According to Frost & Sullivan, in 2023, global logistics spending will be about US$11.0 trillion, of which US$3.7 trillion will be spent on road freight. However, millions of merchants, large and small, around the world still face many challenges, as they rely heavily on traditional offline methods — phone calls, agency recommendations, and referrals from acquaintances in the process of finding drivers to complete transportation. Looking for a driver is not only a waste of valuable time, but also an unnecessary cost. For many merchants, the usage rate of their own fleet is low, and economies of scale cannot be achieved.

Drivers, on the other hand, are always seeking more transportation orders to reduce idle capacity, reduce air returns, and increase revenue. Today, tens of millions of merchants and drivers that cannot be satisfied with the traditional logistics industry need online digital logistics platforms to drive their business development more than ever before.

According to Frost & Sullivan, Cargo Lala is the pioneer and main driver of digitalization in the road freight industry, especially in the freight segment in the same city. The company launched the company's platform in Hong Kong, China in 2013 to digitize road freight, an industry mostly traded offline.

In 2014, the company entered the large and rapidly growing road freight market in mainland China and Southeast Asia, which has great potential in terms of digitalization. Since 2014, the company has expanded into mainland China and other cities in Southeast Asia. The company also began entering other overseas markets such as Latin America in 2019.

Over the years, the platform built by Cargo Lala has solved all the core logistics needs of same-city and cross-city freight transactions, while also providing diversified logistics services and value-added services for merchants and drivers. The company uses technology to build an online connection channel for merchants and drivers, digitize the transaction process and optimize efficiency. On the company's platform, merchants can obtain convenient, reliable and cost-effective freight services from a large number of drivers to complete their real-time or scheduled transportation orders.

On the other hand, the company's platform matches a large number of orders for drivers, allowing them to select orders according to their own shipping capacity, schedule, and personal preferences, which not only makes their work more flexible, but also actually increases their income. By increasing value for both merchants and drivers, the company can rapidly expand its business globally and consolidate its leading position in Asia.

Cargo Lala connects and serves merchants and drivers through a platform model. The company's platform enables closed-loop transactions from online ordering to intelligent order matching, automatic broadcasting, and after-sales service. Prices are mainly pre-determined by merchants and drivers, and are completely transparent to both merchants and drivers. As the company adopts an asset-light business model, the company does not own vehicles that drivers use to provide digital freight services.

Cargo Lala provides freight platform services, diversified logistics services for merchants, and value-added services for drivers.

According to the prospectus, Lala has signed multiple rounds of financing agreements with pre-IPO investors. Such investors include Gao Wei, Sequoia China, Sequoia Capital, Concept Capital, Shunwei, and Qingliu.

The amount of capital raised in the Hong Kong IPO will be used to drive the growth of the core business in mainland China and expand the range of services in the next three to five years; further accelerate the company's global business expansion in the next three to five years to seize the broad opportunities in the global logistics market; further invest in R&D over the next three to five years to continuously develop and enhance the company's technical infrastructure, because technology is the core element that drives the company and freight; and used for working capital and general corporate purposes.


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