JD, Tencent invest $1.55b in Chinese online auto platform

US-listed Bitauto has agreed to issue $1.3 billion worth of new shares to both investors priced at $73.31 apiece, according to a statement. The joint investment comprises $550 million in cash - $400 million from JD and $150 million from Tencent - and $750 million in exclusive resources from JD, which will feature Bitauto vehicle listings on its sites.

Upon completion of the transaction, JD and Tencent will hold 25% and 3.3% of Bitauto, respectively.

Separately, JD.com and Tencent have together invested a further $250m in a Series A round of funding for YiXin Capital, a Bitauto subsidiary that finances automotive-related e-commerce businesses. JD will hold 17.7% of Yixin Capital, while Tencent will own 26.6%.

"The three companies will work together to provide enhanced online automotive transaction services to car buyers across China," Bitauto said.

Established in 2005, Bitauto provides pricing information and reviews on new and used cars. It also sells advertising and marketing services to car dealers and auto makers. AVCJ Research records show that the firm raised four rounds of funding between 2006 and 2009, from investors such as DCM, Legend Capital and Bertelsmann Asia. The company went public in 2010, raising $127.2 million.

Revenue came to RMB1.44 billion ($232.4 million) in 2013, up from RMB1.01 billion the previous year, while net profit RMB134.6 million to RMB235.1 million.

China's auto-related e-commerce vertical has attracted a considerable investor interest. Last year, Warburg Pincus and Tiger Global Management committed $260 million to Youxinpai, China's leading used car auction platform. The company was founded by former Bitauto executives in 2011 and previously received funding from Legend, Bertelsmann Asia Investments, DCM and Tencent Collaboration Fund.

Three other second-hand car trading platforms - Mychebao, Youche, Cheyipai and Souche - have received VC support in the last 18 months, while GGC Capital invested in after-sales service platform Yangche Diandian in December and in late 2013 PE-backed Autohome, an online marketplace for new cars, went public in the US.

PE-backed JD.com raised $1.78 billion in an US IPO last year. It sold shares to Tencent Holdings, Alibaba's major rival, after forging a strategic partnership with the company ahead of the offering.

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• Topics
• Greater China
• Consumer
• Technology
• PIPEs
• China
• JD.com
• Tencent
• Consumer
• TMT
• automobiles
• PIPE