Uxin, a China-based used vehicle marketplace backed by internet company Baidu, has raised $500m in new funding, China Money Network reported today, showing the worth of the country’s transportation startup space extends beyond ride ordering.
The round was co-led by private equity group TPG, multi-family office Jeneration Capital and investment firm China Vision Capital, and included investment firms KKR, Tiger Global Management and Warburg Pincus, investment management firm Hillhouse Capital, venture capital firm Huasheng Capital and, according to Asian Venture Capital Journal, a fund owned by outdoor advertising specialist Focus Media.
Uxin is the operator of an online platform called Youxinpai where consumers can buy and sell used vehicles, as well as a business-to-business vehicle marketplace dubbed Uxin Pai and a financing service for automotive purchases. It expects to be responsible for the sale of some 800,000 vehicles during 2017, equating to a total transaction value of RMB60bn ($8.7bn).
The latest funding follows a $170m round backed by Baidu, TPG and investment management firm Coatue Management in early 2015, the year after Warburg Pincus had provided $260m in funding.
Investors include internet group Tencent and VC firm DCM, as well as Legend Capital and Bertelsmann Asia Investments, subsidiaries of conglomerate Legend Holdings and media company Bertelsmann respectively, which invested $30m in Uxin in 2013.
Uxin closed the new funding at a time when China’s used car market is heating up. New car sales have risen every year since 1991, fueled by government tax breaks, which in turn has prepared the ground for a vibrant used car market that companies like Uxin aim to exploit, and there are many companies like Uxin.
Renrenche had raised $260m in funding from backers including Tencent, as of September 2016, while Cheipayi pulled in $185m in funding over the course of 2016, from investors that included Tencent, fellow internet company Renren and carmaker BAIC Group.
Tiantianpaiche, which specialises in online vehicle auctions, received $100m in a November 2016 round featuring Tencent, telecommunications and internet company SoftBank, trading and technology firm SIG, and Bitauto the automotive data platform that has itself entered the e-commerce market.
Bitauto is perhaps the best funded of all the services, having raised $550m in an August 2016 round featuring Baidu, Tencent and e-commerce firm JD.com, but the confluence of repeat investors in the sector may well point to who will ultimately be in control.
The fact Baidu and Tencent have stakes in multiple operators together with their own online services interests suggest consolidation in the sector may well be on the cards. The larger players, which include Uxin, may well end up absorbing competitors as they seek to gain control of the sector in the same way as Didi Chuxing has used M&A deals to dominate the country’s ride hailing space.