Webus International Ltd., which provides group transportation services online, aims to raise as much as USD 24 million by selling 4 million shares at USD 4 to USD 6 apiece, according to an update filed to its original prospectus filed in February. The company plans to spend some of the funds on setting up a new subsidiary or representative office in the U.S., where it already has some operations, and will use the rest as working capital.
With most travel and other restrictions in China now clearly in the rear-view mirror, the company should be in prime position to ride a revival of travel demand across the country.
But there’s just one hitch: Many others are vying for the same pie as Webus in a market with relatively low barriers to entry. That could put the brakes on the company’s most important goal of operating profitably, which will ultimately determine its long-term sustainability. In the current competitive environment, it’s far from certain it can reach that goal.
Founded in 2019, Webus provides bus-based services of all types, including commuter shuttle buses, customized chartered buses and package tours, through its platforms. Its users comprise institutions like companies, schools and nursing homes, as well as individuals.
That rebound looks set to continue as China’s travel market finally starts to recover. While the overall market for automobile travel services in China is projected to grow about 6.5% annually from 2022 to 2026, the segment for collective mobility services that are Webus’ specialty is forecast to grow at more than twice that pace, according to third-party market data cited in the prospectus.
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