
Chinese second-hand car platform Youche raises $18m
Youche.com, a Chinese online trading platform for second-hand cars, has raised an $18.2 million Series B round led by Galaxy Capital, followed by IDG Capital Partners, ZhenFund and China Growth Capital.
The transaction came after the firm raised a Series A round from IDG last year. It secured seed funding from ZhenFund in December 2013.
Beijing-based Youche, which was founded by former employees of Chinese online classifieds site 58.com, also operates physical outlets that sell second-hand cars. The company receives a 3% commission from each transaction.
Lin Cong, CEO of Youche, told Tencent QQ News that the company will shift its strategy to use financial instruments to cover the expense in auto showrooms and pay more attention to the vehicles' quality control, which is similar to US-based online auto trading platform CarMax's business model. Youche currently has more than 500 cars displayed in its two offline showrooms.
China's used car market has gained traction with PE and strategic investors. A few weeks ago, JD Capital and Addor Capital led a RMB300 million Series B round for Mychebao.com, a Chinese online trading platform for second-hand cars. Meanwhile, Tencent Holdings led an $85 million Series C round for Renrenche.com, a Chinese peer-to-peer second-hand car trading platform. Earlier this year, KKR teamed up with search giant Baidu and US-based hedge fund sponsor Coatue to invest $170 million in Uxin, a Chinese online used car auction company best known for B2B platform Youxinpai.
In addition, Baird Capital led a Series A round for Carsing, a Shanghai-based used car auction platform, followed by FLAG Squadron Capital and Delta Capital. Social networking platform Renren also led a $110 million Series D round for second-hand car trading platform Cheyipai.
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