Tencent leads $818m round for China’s Chehaoduo
Chehaoduo, a Chinese online auto services provider that runs consumer-to-consumer (C2C) used car trading platform Guazi, has raised $818 million in a Series C round of funding led by Tencent Holdings.
New investors include ICBC International, Yunfeng Capital, FountainVest Partners, GIC Private, IDG Capital and Taihe Capital. Existing investors Sequoia Capital China, H Capital, DST Global, Capital Today, Shougang Fund and Shanhang Capital Investment also participated.
Chehaoduo, which means "many cars" in Chinese, was formed late last year as part of a rebranding of existing C2C used car platform Guazi and new car retail platform Maodou. The two platforms operate independently.
Guazi was set up in 2014 by online marketplace Ganji.com, which merged with its competitor 58.com the following year. A few months later, 58.com decided to spin off Guazi.com into an independent entity. Guazi provides a platform to connect individual car sellers and buyers. To build credibility and increase buyer confidence, it only lists vehicles that have been certified by in-house technicians and provides after-sales services including vehicle financing and auto insurance.
Guazi raised $250 million in Series A funding in 2015, with Sequoia, GX Capital, and Welight Capital among the backers. Last year, it raised about $600 million in a Series B round across two tranches of funding: an initial round of $400 million in June, led by Sequoia, and a further $180 million round in November.
Guazi’s services cover more than 200 cities in China, with 6,000 employees supporting its offline operations. The company claims to be the country’s largest used-car online transaction platform in terms of monthly app downloads and PC usage.
The company expanded into the new car segment with the Maodou brand. Launched in September 2017, Maodou works with more than 20 car manufacturers such as SAIC Volkswagen and Infiniti to sell new vehicles and provide auto financing to car buyers.
Tencent said in a statement that it was optimistic about the growth prospects of China’s online used-car services, as well as the combination of online and offline services in the automobile industry.
Following the latest funding round, Chehaoduo will strengthen Guazi’s offline operations and accelerate Maodou’s new car sales business. It plans to open physical stores in major Chinese cities, with a view to providing better after-sales services. Meanwhile, it will continue to develop its online technology and new products.
Chinese online auto platforms have drawn strong interests from PE and strategic players, with well-funded companies including Renrenche, Chezhibao, Uxin, and Tiantian Paiche.
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