Chinese car trading platform Yiauto raises $22m
China-based Yiauto, a car trading service provider that targets customers living in lower-tier cities, has raised RMB150 million ($22 million) across two tranches of a Series A round.
The first tranche was committed by China Renaissance K2 Ventures (K2VC), while the second tranche saw participation from GGV Capital and Bluerun Ventures.
Founded in 2015, the Xiamen-based company offers an online platform that showcases cars provided by auto suppliers across China for customers living in third or lower-tier cities, where auto retail outlets are not as dense as in more developed cities. Customers order the cars online and pick them up at one of the company’s 60 directly operated stores and over 500 franchised outlets. Yiauto claims to have transacted over 35,000 orders with an accumulated gross merchandise value of RMB4 billion for 2018.
Compared to traditional auto dealers in lower-tier Chinese cities that are highly fragmented, Yiauto claims its edge is to aggregate the demand of customers and source the cars from factories or suppliers directly, reducing the layers in the supply chain and thus lowering the price of vehicles. The company expects demand for cars in these cities to be resilient despite a plunge in overall sales in China last year. A large portion of the customers in first or second-tier cities have already purchased the cars they need, and automobile penetration in other markets remains limited.
Chinese online auto platforms have drawn strong interests from PE and strategic players, with well-funded companies including Renrenche, Chezhibao, Uxin, and Tiantian Paiche. The B2B model has been the most popular, but larger players have sought to expand their coverage into C2B, B2C and C2C.
Despite heated investor interest, some companies are said to have run into trouble recently. Renrenche, for example, has started employee layoffs in Beijing and Chengdu. It said these moves were part of internal adjustments, adding that it would cease operations in some lower-tier cities this year to focus on top-tier locations, according to 36Kr.
More on Greater China
Latest News
Asian GPs slow implementation of ESG policies - survey
Asia-based private equity firms are assigning more dedicated resources to environment, social, and governance (ESG) programmes, but policy changes have slowed in the past 12 months, in part due to concerns raised internally and by LPs, according to a...
Singapore fintech start-up LXA gets $10m seed round
New Enterprise Associates (NEA) has led a USD 10m seed round for Singapore’s LXA, a financial technology start-up launched by a former Asia senior executive at The Blackstone Group.
India's InCred announces $60m round, claims unicorn status
Indian non-bank lender InCred Financial Services said it has received INR 5bn (USD 60m) at a valuation of at least USD 1bn from unnamed investors including “a global private equity fund.”
Insight leads $50m round for Australia's Roller
Insight Partners has led a USD 50m round for Australia’s Roller, a venue management software provider specializing in family fun parks.