SoftBank Vision Fund, the venture capital fund formed by telecommunications and internet group SoftBank, invested €460m ($565m) in Germany-based online used vehicle marketplace Auto1 Group today at a $3.56bn valuation.
Half of the investment went into newly issued shares, Auto1 said in a statement, but it did not disclose the identity of the selling shareholders.
Founded in 2012 and originally known as PKW1, Auto1 operates a used vehicle e-commerce platform that is open to both professional dealers and individual sellers in 30 countries.
The service, which uses data analytics technology to link buyers with the most relevant sellers, has registered some 35,000 professional partners and is responsible for the sale of more than 40,000 vehicles a month.
The company has now raised almost $1.1bn in total financing, according to the Financial Times. It had secured $200m from investment firm DST Global, venture capital firms Cherry Ventures and Piton Capital, and Mutschler Ventures, the VC arm of property developer Mutschler Group, it said in a 2015 press release.
However, Auto1 did not mention whether that figure could be tracked back to its formation or whether it was part of a forthcoming round in which it planned to raise $500m in debt and equity financing, at a valuation of $1bn according to Bloomberg.
Auto1 added $404m in debt and equity in a May 2017 series E round led by an $84m contribution from investment firm Princeville Global. The round included Target Global and Baillie Gifford and valued the company at $2.8bn.
Hakan Koç co-chief executive of Auto1, said: “We are delighted to welcome SoftBank Vision Fund, one of the largest tech funds in the world, as an investor in Auto1 Group.
“We believe that the fund’s deep investment and technology expertise will help us to accelerate our growth as we continue to focus on making the used vehicle market more efficient and transparent.”
Akshay Naheta, partner at SoftBank Investment Advisors, will join Auto1’s board of directors in connection with the investment. He added: “Auto1 Group has built a fast growing, data-enabled platform introducing efficiency and transparency to the fragmented used car market, which is worth more than $300bn annually.
“The SoftBank Vision Fund’s capital and our operational expertise with marketplace businesses will support continued global growth.”
The deal represents the first German investment by SoftBank Vision Fund, which has raised almost $100bn in capital, but it could theoretically complement what are now sizeable stakes for SoftBank in on-demand ride providers Uber, Didi Chuxing, Grab and Ola, and Auto1’s e-commerce algorithm technology is likely to have been a factor.
The investment is also notable in that it is the first large corporate-backed round to be closed by a used car marketplace outside China (US-based Vroom and Carvana have each raised approximately $300m in funding but have disclosed no corporate investors), where the likes of Yixin, SouChe, Chehaoduo and Renrenche have all secured large sums.
Koç told the FT that Auto1 will use the latest funding to expand the range of products and services it provides, and SoftBank’s holdings in ride hailing platforms suggest one of those could be the supply of cars to their drivers, though automotive financing would also be a likely move. In any case, the route to growth seems wide open at present.