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J&T Express completes latest funding round, boosting valuation to $19.77 billion

November 18, 2021 4:41 am

Indonesia-headquartered logistics company J&T Express completed Series C1 round of financing on Wednesday, raising its valuation to $19.77 billion.

This round of financing of $1.7 billion was led by D1 Capital, followed by Boyu Capital, Temasek, and Sequoia Capital. 

It only took the company six years from its inception to attain a valuation of roughly $20 billion.

Founded in 2015 by Jet Lee and Tony Chen, former executives of Oppo, a well-known Chinese smartphone company, J&T has established itself in seven Southeast Asian countries including Indonesia, Philippines, Malaysia, Thailand, Vietnam, Cambodia, and Singapore.

J&T was able to rapidly expand its market share in Southeast Asia by leveraging the retail network and connections of the founder's former employer, as well as implementing the price-cutting strategy, and counting e-commerce companies Tokopedia, Shopee, and Bukalapak, among others, as its e-commerce partners. In terms of daily order volume, the firm claims to be second in the area and first in Indonesia.

After establishing a firm presence in Southeast Asia, J&T intended to test the waters in China, the founder's home country, and formally began the voyage with the acquisition of Longbang Express, a Shanghai-based logistics company, in 2019.

By collaborating with China's second-largest e-commerce site Pinduoduo and delivering lower-priced services, the courier quickly gained an 8% market share in the nation, behind only A-share listed SF Express, which has a 9.6% market share.

The disruptor of China's logistics market has clearly become one of the investors' darlings. In April, it raised more than $2 billion from Boyu Capital, Sequoia Capital and Hillhouse Capital. In August, it secured additional an $250 million investment, boosting its valuation to $18 billion.

In addition to Southeast Asia and China, J&T Express is also expanding into Latin America and the Middle East, where the e-commerce sector is booming. According to an insider of the company, it is working closely with Southeast Asian e-commerce giant Shopee in Latin America.

In October, the company announced that it will acquire the Chinese operation of rival Best in a 6.8 billion yuan ($1.07 billion) cash deal. The transaction, which is still subject to regulatory clearance, is anticipated to conclude in the first half of 2022.

Citing people familiar with the matter, Bloomberg reported in August that the company is considering shifting its planned US initial public offering to Hong Kong in a debut that could raise about $1 billion, and the potential first-time share sale take place as early as next year.