Chinese internet giants invest $550m in Bitauto unit
Tencent Holdings, Baidu and JD.com have invested $550 million in China-based auto financing platform Yintai Capital. The business was launched by Bitauto, which previously received funding from the three internet companies as well as from PAG Capital.
The US-listed parent company, which will hold a 47% stake in Yintai on a fully diluted basis, will continue to consolidate financials of the unit, according to a statement. Yixin said the data, users, and capital resources provided by the investors will help the company perform more accurate and efficient credit evaluations, as well as to improve product offerings.
This is the third investment that Tencent and JD.com have made in Bitauto. After a $1.55 billion commitment in January 2015, the two companies, along with Baidu and PAG, participated in a $300 million round last month. Proceeds went towards the development of Bitauto's e-commerce, social media and big data business plans.
"Yixin Capital is an important part of Bitauto's platform as we work to create the best possible car purchasing experience for China's new and used car consumers," said William Li, CEO and chairman of Bitauto. "We are confident that with the strong support of our partners, Yixin Capital is well positioned for long-term success in China's online automotive financing industry."
Founded in 2000, Bitauto offers advertising services to automakers through two websites and provides consumers with up-to-date car pricing, promotional information, specifications, reviews and customer feedback. AVCJ Research's records show that the firm raised four rounds of funding from investors such as DCM, Legend Capital and Bertelsmann Asia, before going public in the US in 2010.
Revenue increased 62% during 2015 to RMB4 billion ($608.8 million); however, the company reported a loss of RMB424.3 million for the year compared to an RMB485.2 million profit in 2014.
JD.com also invested in Meili Jinrong, a peer-to-peer (P2P) online lending platform, with a view to developing online financing business for second-hand car buyers. In April, China Growth Capital led an extended Series A round worth $34 million for Chedai.com, an automobile financial lending platform.
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