Renrenche, the China-based automotive marketplace that has raised $760m from investors including internet group Tencent and ride hailing service Didi Chuxing, could sell its major assets for as little as HK$10,000 ($1,290), Bloomberg reported yesterday.
The prospective buyer is classified listings operator 58.com, according to people familiar with the matter. The deal would involve 58.com taking over Renrenche’s Hong Kong business and extending at least $4m in debt financing to its mainland China business.
Founded in 2014, Renrenche runs an online platform that allows users to buy and sell used vehicles to each other. However, the downturn of its business caused by the coronavirus, combined with intense competition from the likes of Guazi, has heavily impacted its business.
One of Renrenche’s creditors, Argyle Street Management, is seeking a winding up order for the company in the Cayman Islands, where it is registered, over a $15m unpaid debt, according to a court filing seen by Bloomberg.
Didi and Tencent are reportedly both among the Renrenche shareholders in favour of the 58.com deal, though a representative of the company has disputed unspecified parts of the Bloomberg reported.
Both corporates reportedly took part in the company’s last round, in April 2018, when it secured $300m in a round led by investment bank Goldman Sachs at a reported pre-money valuation of $1.4bn.
Tencent first invested in Renrenche in 2015, adding $85m in series C funding to earlier financing from shareholders including Redpoint Ventures, Ceyuan Ventures and Shunwei Ventures, at a $500m valuation.
The company raised $150m from industrial park builder HanFor Holdings, China Minsheng Bank’s China Minsheng Investment unit, Prometheus Capital, Xinjun Capital, Redpoint Ventures, Shunwei Capital and Ceyuan Ventures in 2016, before Didi invested $200m the following year.
