China-based classified listings provider 58.com agreed yesterday to spin out its second-hand goods mobile commerce platform Zhuan Zhuan with $200m of funding and resources from internet group Tencent.
The new company, dubbed Zhuan Zhuan Entities, will encompass the Zhuan Zhuan platform and certain used goods channels from 58.com itself and Ganji.com, the locally-focused listings site 58.com acquired in a $2.8bn cash-and-share deal in 2015.
Zhuan Zhuan was launched in 2015 and is a mobile marketplace for second hand consumer items. Users upload images and a description of what they are selling and the platform functions as a middleman for payment, transferring the money once the item has been received.
The Tencent investment is expected to close in the second quarter of 2017. Tencent is a long-term investor in New York Stock Exchange-listed 58.com itself, having paid $736m for a 20% stake in 2014 before adding $100m later in the year and another $400m at the time of the Ganji acquisition.
Wei Huang, Zhuan Zhuan’s CEO, said: “Thanks to our platform, trading used goods is getting easier and can benefit everyone. Since our launch in November 2015, we have been picking up tremendous momentum by continuously focusing on improving the user experience and developing a robust online ecosystem.
“This transaction will immediately help to strengthen our support, and we are excited to explore how we can further enhance the overall service capabilities and technology of the business.”