(Yicai Global) Jan. 27 -- The eight-month-old on-demand trucking arm of Didi Chuxing, China’s dominant ride-hailing services provider, has raised USD1.5 billion in its first fundraiser, the online Economic Observer reported today.

Didi Freight’s Series A financing round was led by Singapore sovereign wealth fund Temasek Holdings and investment firms Citic Private Equity Funds Management and IDG Capital, the report said.

Beijing-based Didi Chuxing invested CNY100 million (USD15.47 million) to set up the unit, which had more than 100,000 orders a day in the first three months after its launch, to tap the vast ‘blue ocean’ of the urban freight market. China’s logistics market is highly fragmented, with its top 10 trucking firms having just a combined 3.5 percent share, according to Zhiyan Consulting.

Intra-city freight is a trillion-yuan market and Didi Freight has to invest more to win an ‘entry ticket,’ the report cited Wang Shu, the founder of logistics platform Lanxiniu, as saying. For the moment, the startup must offer subsidies to attract clients, he said.

There are also reports that competitor Lalamove, known as Huolala Technology in China, has just secured USD1.5 billion in Series F fundraising led by Hillhouse Capital. But this has yet to be confirmed by the Shanghai-based company.

Other participants in Didi Freight’s fundraiser included Hidden Hill Capital, VMS Investment, Country Garden Venture Capital, Yunfeng Capital and Zhongguancun Longmen Fund, the Economic Observer said.

Editor: Kim Taylor