Uxin trades up on debut after $225m US IPO

The company sold 25 million American Depository Shares (ADS) at $9.00 apiece, according to a filing. It initially sought to sell 38 million shares with a target pricing range of $10.50-12.50. The stock closed at $9.90 on June 27. None of Uxin’s private equity investors – the largest of which is Jeneration Capital, an investment firm that sources most of its capital from Chinese technology and real estate entrepreneurs – exited any shares through the offering.

Concurrent to the IPO, Uxin completed a private placement of convertible notes worth $175 million. The investors are CNCB, an affiliate of China CITIC Bank, and a vehicle managed by ICBC Asset Management, a unit of Industrial & Commercial Bank of China (ICBC). Uxin has strategic cooperation agreements with both banks under which they will provide auto loan products tailored for its customers.

The company was established in 2011 by a group of former executives at auto listings provider Bitauto. It 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.

Kun Dai, Uxin’s founder, chairman and CEO, has a 21.5% equity interest in the company and has 46.5% of the voting power. A portion of these shares are held by Kingkey New Era Auto Industry, a vehicle jointly owned by Dai and Jeneration. Kingkey invested $225 million in Uxin in January as part of a $250 million Series G-plus round and has a 12.8% stake.

Jeneration’s overall interest in the company is 19.3%. Warburg Pincus has 12.2%, while Baidu, Tiger Global, Hillhouse and Legend own 8.7%, 7.7%, 7.3%, and 6.4%, respectively.

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