China second-hand car platform raises $50m
Haoche51, a Chinese C2C second-hand car trading platform, has raised $50 million in a Series B round of funding led by Source Code Capital and domestic investor Fenghuang Xiangrui Fund.
Chinese online finance site 9fbank and existing backers Matrix Partners China, Chengwei Capital and FutureCap also participated.
The platform, which was launched in July last year, connects second-hand car owners and buyers. Haoche51's auto experts appraise the cars and list them online for sale. Interested buyers can then make an offer to the owner.
The C2C model cuts out traditional second-hand car dealers who usually buy vehicles and sell them on at a 15-20% premium. Haoche51 charges about 3% in commission on each transaction, as well as generating income from providing auto finance and after-sales services.
The start-up previously received a seed round from FutureCap and a Series A round worth $20 million in November last year led by Source Code and Matrix.
Haoche51 plans to use the latest round to upgrade its services. It has launched a car repurchasing program, which claims to offer higher prices than dealers and auto shops to buy used cars from owners and then sell to consumers at a price lower than traditional stores.
Cheng Peng, founder and CEO of Haoche51, told 36kr the company befits from being an asset-light platform. Without any rental costs, Haoche51 can offer competitive prices to car owners and sellers in light with high online transaction volumes.
China's used car market has gained traction with PE and strategic investors. The most recent deals have seen Youche.com raise an $18.2 million Series B round led by Galaxy Capital, and Mychebao.com secure $50 million from JD Capital and Addor Capital.
Meanwhile, Tencent Holdings led an $85 million Series C round for Renrenche.com, while earlier this year KKR teamed up with search giant Baidu and US-based hedge fund sponsor Coatue Management to invest $170 million in Uxin, a Chinese online used car auction company best known for B2B platform Youxinpai.
Most of the investments has targeted the B2B and B2C segments. While private equity capital is pouring into the B2B online car-trading platforms, some investors claim to see more value in smaller scale but less-penetrated and higher-margin C2B space.
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