China used car trading business Uxin files for US IPO

Details on the size and pricing of the offering have yet to be disclosed. While there have been listings by other Chinese automobile-focused online services businesses – listings provider Bitauto went public in the US in 2010 and its financing subsidiary Yixin completed a Hong Kong IPO last year – this will be the first by a car-trading platform. There has been a lot of private investment in the space.

Uxin was established in 2011 by a group of former Bitauto executives. The company was known as Youxinpai, which remains the brand name of its second-hand car trading business. Initial funding came from Legend Capital, DCM, Bertelsmann Asia Investments and Tencent Collaboration Fund before Warburg Pincus and Tiger Global led a $260 million round in 2014.

At the time, the company was transitioning to an online-to-offline model, having opened six centers that allowed for site inspections and the provision of after-sale services. It had provided auction services to about 15,000 sellers and claimed the highest transaction volume of any online B2B used-car trading platform in China.

Uxin is now the largest car e-commerce platform in China by number of transactions facilitated and gross merchandise value (GMV), according to iResearch Consulting. Its business has two main strands: the B2B Youxinpai operation and a consumer-facing platform that provides recommendations, financing, title transfer, delivery, and other services. The market share of the two platforms in 2017, based on GMV, was 41% and 42%, respectively.

As of March, the company had 670 service centers across 270 cities. It facilitated the sale of 634,317 used cars in 2017, up 67.9% year-on-year, while GMV rose from RMB26 billion ($4 billion) to RMB43.4 billion. Uxin’s revenue – which primarily comes through transaction fees and car financing services – reached RMB1.95 billion in 2017, up 136.7% from the previous year, while its net loss widened from RMB1.39 billion to RMB2.75 billion.

Uxin received $170 million from KKR, Baidu and Coatue in March 2015; the prospectus indicates that $150 million in Series E shares was issued to Baidu, Hillhouse Capital, Jeneration and two other entities.

In 2017, it was announced that the company had raised a $500 million round led by TPG Growth, Jeneration, and China Vision Capital. This corresponds to a series of transactions between late 2015 and early 2017 that also featured Hillhouse, Jeneration, Warburg Pincus, and Huasheng Capital, among others. 

Jeneration, an investment firm that sources most of its capital from Chinese technology entrepreneurs, is the largest outside shareholder in Uxin. Its funds own 22.3% directly and it has an interest in Kingkey Global, which holds a 14.8% stake. Warburg Pincus has 14.1%, while Baidu, Tiger Global, Hillhouse and Legend own 10%, 9%, 8.4%, and 7.4%, respectively.

Uxin’s major competitors in China’s used-car trading segment are Souche, Guazi, and Renrenche. Souche – which closed a $335 million round led by Alibaba last year – focused on new car sales until it acquired Cheyipai in April. This followed an $818 million round for Chehaoduo, the parent of Guazi, led by Tencent Holdings. Renrenche last raised capital in September 2017, receiving $200 million from Didi Chuxing.

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• Topics
• Greater China
• Technology
• IPO
• China
• TMT
• Transportation
• Jeneration Capital
• Warburg Pincus Asia
• Tiger Global Management
• Hillhouse Capital Management
• Legend Capital