China: Used-car trading platform Uxin eyes up to $500m in US IPO

Traffic travels along the Second Ring Road in Beijing, China, on Wednesday, Dec. 2, 2015. Photographer: Qilai Shen/Bloomberg

China’s used car trading platform Uxin Limited has filed for an initial public offering (IPO) in the US, targeting to raise up to $500 million to boost service capabilities and fund potential investments and acquisitions.

In a filing with the US Securities and Exchange Commission (SEC), the Beijing-based company, which counts Chinese search engine giant Baidu as one of its major shareholders, said it plans to list on the Nasdaq under the symbol UXIN, which means quality and trust in Chinese.

Founded in 2011 by Dai Kun, a former executive of car trading platform Yiche, Uxin told the SEC that it is the largest used car e-commerce platform in China in terms of both the number of transactions facilitated and total gross merchandise volume (GMV).

In its prospectus, the company said it recorded a transaction volume of 634,317 cars and a gross GMV of Rmb43.4 billion, or about $6.7 billion, last year, an increase of 68 per cent and 67 per cent, respectively from 2016.

The company booked $2.3 billion in sales for the 12 months ended March 31, 2018. In January, Uxin raised $500 million in a Series D round from investors that include Warburg Pincus, TPG and Jeneration Capital. An earlier $170-million Series C round was led by Baidu in 2015.

“Both consumers and businesses in China face significant challenges in buying and selling used cars, such as access to a limited number of vehicles, incomplete and unreliable information about vehicles, and complex transaction processes,” the company said.

To address these issues, Uxin said its platform enables consumers and businesses to discover, evaluate and transact in used cars throughout the country.

According to global research firm iResearch, China is the world’s second-largest automotive market as measured by registered vehicles and is forecasted to become the largest automotive market by 2023. As of the end of 2017, there were approximately 185 million registered vehicles in the country, compared with 275 million in the US.

Total used car transaction volume in China reached 12.4 million in 2017, with the ratio of the country’s used car sales to new car sales by volume at 0.5, significantly lower than 2.4 per cent in the United States.

Uxin’s business is composed of Uxin Used Car, which caters to consumer buyers, and Uxin Auction, which caters to business buyers.

“The primary purposes of this offering are to create a public market for our shares for the benefit of all shareholders, retain talented employees by providing them with equity incentives, and obtain additional capital,” Uxin said.

Specifically, the company plans to use the net proceeds of the offering to improve its transaction service capabilities, finance its research and development efforts, and to fund potential strategic investments and acquisitions.

China’s auto industry market has been witnessing a significant increase in car purchases via the e-commerce route, triggering the rise in the number of used-car trading platforms that have raised funds recently.

Chezhibao, which operates Chinese used car online auction platform Mychebao.com, raised $100 million in its series C round of funding led by private equity firm PAG in March. Renrenche, a classified site that allows car owners to sell directly to other consumers, was also reportedly raising a $300-million funding round led by Goldman Sachs.

Last November, Tiantianpaiche, another used car online auction platform, successfully raised $100 million in a Series C funding round backed by Tencent Holdings Ltd.

Also Read:

Goldman Sachs to lead $300m round for Chinese used car platform Renrenche

China’s used car financing startup Meiliche secures $92m led by New Hope Group

Singapore Reporter/s

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Following vacancies can be applied for (only in Singapore).   

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.