Warburg Pincus backs China online auto parts business

Founded in 2013, Baturu’s product offering is based on an independently developed auto parts database, trading system and supply chain. The company is now best known for its Qipeipu B2B platform, which launched in late 2014 and handles the entire transaction process, from product search and price comparison to payment and delivery.

The company claims to provide parts for more than 60 mainstream car brands and 100,000 individual models, accounting for 95% of all models in the China market. It also has an offline service network of over 50,000 garages and repair shops nationwide. The new funding will go towards expanding these operational and offline delivery capabilities, with a view to further expansion.

For Warburg Pincus, Baturu represents a consolidation play in an industry that recorded compound annual growth of 20% between 2011 and 2016 – and is expected to be worth RMB800 billion by 2022, according to Roland Berger – but has no single participant with a more than 1% market share.

“Baturu is the most innovative company in China’s large and highly fragmented auto parts supply chain market. We believe that the company is well positioned to become a leading player and consolidate the market. Baturu benefits from an experienced management team with a proven track record in the field of auto parts and the internet space,” said Hugo Hu, a principal at Warburg Pincus, in a statement.

Baturu received RMB100 million ($8.1 million) in Series A funding from QF Capital in 2015, according to AVCJ Research. This was followed in 2016 by a RMB100 Series B round provided by investors including Eastern Bell, China Growth Capital, and Guangzhou Yuexiu Industry Investment Management.

This is not the first time Warburg Pincus has invested in a start-up seeking to disrupt the traditional mechanics of China’s auto industry. The private equity firm’s portfolio includes second-hand car trading platforms Uxin and Souche, designated driver service eDaijia, and electric vehicle manufacturer NIO. It has also backed car rental player China Auto Rental (CAR) and chauffeured car spin-off Ucar.

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• Topics
• Greater China
• Expansion
• Technology
• China
• TMT
• automobiles
• Warburg Pincus Asia
• Growth capital