China’s Uxin Group raises $500m funding co-led by PE giant TPG

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Photo: Bloomberg

China-based online used-car company Uxin Group has raised $500 million funding co-led by global private equity firm TPG, along with Chinese multi-family office Jeneration Capital and value investment firm China Vision Capital.

Other existing and new investors who participated in the round include Warburg Pincus, Tiger Gobal Management, Hillhouse Capital, KKR & Co LP and Huasheng Capital.

TPG Capital Asia currently manages approximately $6 billion in assets from its offices in Beijing, Hong Kong, Melbourne, Mumbai, and Singapore. Earlier this month, the PE giant invested $215 million in another Chinese startup Mobike, a bike sharing startup alongwith other investors.

Founded in 2011, Uxin is an online transaction service provider for used cars and its core business covers online used car auctions, a retail B2C retail platform for used cars, and used car financing services.

In March 2015, the company had raised $170 million from China’s leading search engine Baidu, global investment firm KKR, and investment management company Coatue. In the same year, Baidu and other investors had again put in $400 million in Uxin.

With the latest round, Uxin has raised over $1 billion funding till date.

Uxin also operates B2B platform for online used car transactions and Uxin Finance, a platform which provides auto financing products to customers. The company reported a monthly revenue of RMB150 million ($21.7 million) last year and a transaction volume reaching 50,000 used car purchases in December alone, according to a statement.

China Vision Capital manages an offshore fund focused on investing in equities, fixed income and derivatives in the Greater China region.

China’s auto industry market has been witnessing a significant increase in the car purchases via the e-commerce route. Auto OEMs (original equipment manufacturers) in the country were worried as the Chinese auto sales market slowed down by about 7.1 per cent in 2015 due to the stock market panic that occurred during June and July 2015. But over the last two years, the auto industry’s interest towards e-commerce strategies has been growing gradually, according to a marketing agency Gentlemen.

China’s leading online marketplaces like Alibaba are helping the car retailers by offering e-commerce partnerships. It has partnered with Yongda, the Chinese luxury car retailer, to host its virtual dealership on its Tmall platform. The second-hand car market trend is also rapidly growing in the region. This segment is expected to overtake the Chinese new car market by 2020, as 70 per cent of new car dealerships announced they were unprofitable in 2015.

Another Chinese portal in the space is MyCheBao.com which offers Chinese customers an online platform to trade used cars. In the similar space, Diyi Chedai, a used-car credit site, completed RMB 360 million ($52 million) Series B round funding last week.

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