Baird Capital backs China used car auction platform
Baird Capital has agreed to lead a Series A round of funding for Carsing, a Shanghai-based used car auction platform. FLAG Squadron Capital and Delta Capital are also contributing to the round.
The size of the investment was not disclosed, but it will be used to support the company's domestic expansion. Carsing was founded in 2009 and currently operates in 15 locations in Shanghai and Shenzhen. It provides vehicle inspection services to dealers participating in auctions run via mobile devices.
"The Chinese automotive market is a rapidly expanding opportunity and Carsing has pioneered a unique business model," said Yongshan Zhang, a principal with Baird Capital's China growth equity team. "We found Carsing's service model answers a critical demand in the supply side of the market, and its experienced leadership and solid track records are an excellent combination."
Greg Ye, a partner with Delta Capital, added that the company - which established a market-leading position in Shanghai before expanding into Shenzhen last year - is well-placed to grow its national footprint. Carsing plans to add 30 outlets this year, entering nine new cities.
The information asymmetry and inefficient distribution channels that characterize China's used car market are seen as an opportunity by PE and VC investors.
Last month social networking platform Renren led $110 million Series D round for second-hand car trading platform Cheyipai. Other groups to receive funding within the last 12 months include Mychebao, Youxinpai, Souche Holdings and Youche.com. A total of 5.2 million used cars were traded in China in 2013 and the market is expected to grow more than fivefold.
Baird Capital is the direct private investment arm of Robert W. Baird & Co. Delta Capital specializes in early-growth equity investments in Chinese consumer and technology businesses, while FLAG Squadron Capital provides solutions to institutional investors targeting venture capital, private equity and real assets.
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