Vision Fund, the $98.6bn investment fund managed by telecommunications group SoftBank, has begun discussions to invest up to $1.5bn in China-based automotive e-commerce platform Guazi.com, Reuters reported on Saturday.
The information was disclosed by two people with knowledge of the matter, one of which told Reuters the deal is set to value the company at $8.5bn pre-money. Vision Fund has also been in talks with one of Guazi’s key rivals, Renrenche.
Also known as Chehaoduo, Guazi runs an online marketplace for second-hand vehicles and is one of the three largest players in the Chinese market, along with Renrenche and the US-listed Uxin.
The company has however been beset by controversies that led to it being fined for unfair competitive practices and false advertising, and Uxin claimed last week it has evidence the company has been falsifying figures for trading data.
Guazi has raised more than $1.6bn in funding since it was founded in 2014, most recently getting $162m in a series C-plus round in October 2018 that included Tiantu Capital, DST Global, Nuoweiqi VC and CKE.
Sequoia Capital, Matrix Partners China, BlueRun Ventures GX Capital, Hike Capital, Welight Capital and StarAngelFund had provided an initial $250m for Guazi’s series A round in 2016.
The company added $400m in series B funding for the company in a mid-2017 round led by Sequoia Capital China and backed by Jingxin Venture Capital, a fund management subsidiary of steel producer Shougang Group, as well as Dragoneer Investment Group, H Capital, CMB International, Matrix Partners China and BlueRun.
Shougang subsidiary Shougang Fund joined Industrial and Commercial Bank of China unit ICBC International, Sequoia China, DST, H Capital, Yunfeng Capital, FountainVest Partners, GIC, IDG Capital, Taihe Capital, Capital Today and Shanhang Capital Investment for an $818m series C round in March 2018.
