Sunday, 2024 April 14

Deals | Ant Financial Invest in Startup I-xiaoma Who Makes Digital Payment on Buses Totally Offline

Writer: Nicholas

I-xiaoma (小码联城), a smart public transportation solutions provider in China, announced today that it had secured ¥200 million investment in its angel round from Ant Financial.

Founded this May, I-xiaoma’s plan is to work its way into the smart public transportation scene by offering mobile ticketing solutions. Its team has already pioneered the usage of “QR code that enables offline payment” in the public transportation system in Wuhan, China.

In most cases, payment through QR code can only be processed when the internet connection is available. But, that’s not the case for the “offline QR code”.

Offline QR code works even when there’s no internet connection. That’s what makes it ideal for the public transportation systems, where the internet connection is often weak, and quick check and entrance are often required because of the high volume of passenger traffic.

It is reported that I-xiaoma has since its foundation branched out into over 50 cities, including 10 provincial capitals and several overseas cities.

New battleground of the internet giants

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At a time when every internet company is looking to expand its traffic gateway, it is out of question that the public transportation systems, where small payment is made at a high frequency and high volume of passengers is recorded every day, would become a hotspot that every internet company contends for.

Alipay rolled out its “QR code ticket” a while back in 2017. Many other mobile internet giants have since then followed its lead and embarked on their own mobile ticketing journey.

To snap up more territories in the public transportation scene, Pony Ma even went to Hefei City and Guangzhou City himself to promote its QR code ticket, which has helped Tencent expedite the expansion of its offline payment solution.

But, Alibaba didn’t lag behind. This December, Ant Financial also inked a partnership with Shanghai Shentong Metro Group to bring smart ticketing solutions to its subway system. Jack Ma also presented this event.

On the other side, China UnionPay is charging full speed ahead to deploy its cloud quick pass in public transportation systems around the country. JD and Xiaomi are also ramping up their efforts in piloting similar programs in different cities.

Apparently, a battle is looming increasingly larger on the public transportation scene over mobile ticketing.

Rivalry with the internet giants

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The founder of I-xiaoma doesn’t seem to worry at all that I-xiaoma could be dwarfed by those internet giants. “The technology and administrative environment in the public transportation systems are unique. The barriers to entry are high, even for those internet giants,” the founder told Kr-Asia.

The founder of I-xiaoma believes that no other internet companies could beat I-xiaoma in its understanding of the public transportation systems, because his team is basically composed of elites from the public transportation sector.

They include specialists with over 10 years’ working experience in bus, subway and smart card systems as well as elites from such internet giants as Amap and Alibaba.

The founder of I-xiaoma told Kr-Asia that I-xiaoma isn’t on competing terms with those internet giants. “I-xiaoma is not a payment services provider, but a smart public transportation solutions provider.

Except for the mobile ticketing part, I-xiaoma also provides other specialized services that set itself apart from the internet giants,” said the founder.

Growth prospect

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The registered daily transaction volume in the public transportation system is 300 million, which far outstrips that of the burgeoning E-hailing and bike-sharing sectors. According to I-xiaoma, the company is to achieve tens of millions of daily transactions in 2018, as it expands into more cities.

“We can attain a volume of tens of millions of daily transactions within only one to two years’ time. That’s not hard. But, we’re interested more in how fast we can introduce such technologies as unmanned driving, facial recognition payment, security control and artificial intelligence into the public transportation scene,” said the founder.

36Kr Global Writers
36Kr Global Writers
The tech ecosystem is roaring. Unicorns valued at billions of dollars have emerged worldwide, while venture capital and strategic investors are constantly on the lookout for the next big thing. 36Kr Global is committed to establishing ties between global stakeholders and providing the most vital information about China’s tech scene and capital markets.

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