Uxin raises US$170 million from Baidu, KKR and Coatue
Leading Chinese used car auction company expands into B2C market
China’s largest online used car auction company announced today that it has raised US$170 million from China’s leading search engine, Baidu, global investment firm KKR, and investment management firm Coatue in its latest round of funding.
This funding round, which closed on March 15, will be used to expand Uxin’s platform into the B2C used car market. Earlier this week, Uxin announced its launch of Uxin Used Car, a B2C platform that will connect auto retailers and used car buyers across China, at www.xin.com. Uxin also announced the launch of a Beta version of its mobile application for the service.
Founded in 2011, the company employs over 1,000 specialists in 50 Chinese cities, who inspect and certify the quality of used vehicles for sale on Uxin’s platforms. Uxin makes use of its proprietary “CheckAuto” system and advanced vehicle identification capabilities to ensure the quality of vehicles sold through its platform. Uxin offers all buyers a full guarantee, and will refund their purchase within 15 days if they discover undisclosed issues with any vehicle bought through Uxin.
Uxin’s existing B2B platform, Uxin Pai (www.youxinpai.com), already ranks as China’s largest used car auction site, with a 47.8 percent market share in online used car transaction volume in the first half of 2014, according to iResearch. Uxin handles over 150,000 annual transactions through its online and on-site auction platforms. In 2014, Uxin also launched Uxin Finance, which provides auto financing products to customers.
Chris Dai, CEO of Uxin, said, “With the launch of www.xin.com, we’re in a position to offer used car buyers wider choice, more transparency, and greater confidence. Uxin hopes to use the strengths of its Internet technologies and experience in the used car market to improve the efficiency of transactions, and to help dealers identify potential buyers with greater accuracy. Additionally, we want to provide more detailed information on vehicles, using our self-developed proprietary CheckAuto quality verification system to boost customer trust and confidence in used car transactions. This is what we’ve been working hard to achieve.”
Kaiser Kuo, Director of International Communications at Baidu, said, “Baidu is focused on connecting people with services, and on offering an end-to-end, closed loop experience from initial query to payment and fulfillment. We want to provide people in the market for used cars with all the information they need, to connect them with the best, most reliable sellers, and to make their transaction as efficient and transparent as possible. With Uxin, we have the opportunity to work closely with the leader in this important, fast-growing space. Together we can meaningfully improve the whole experience of buying a used car in China.”
Julian Wolhardt, Member of KKR, said, “China’s online used car market is set to boom in the coming years, and KKR is very positive about this industry and about Uxin, given the excellent performance of its B2B business. Uxin’s expansion into the B2C e-commerce segment comes at an important time for China’s used car market. We very much look forward to cooperating with Uxin and its partners.”
KKR has a long-established track record of supporting technology companies, having invested more than US$13 billion of equity in more than 49 companies across software, Internet, media and IT-infrastructure since 2000. Having partnered with global retail, technology and Internet companies, KKR will leverage its experience to help Uxin achieve its growth goals. It invests through its China Growth Fund.
Total transaction volume on the Chinese used car market was RMB368 billion (approximately US$58 billion) in 2014, representing 26.03 percent growth from 2013, according to CADA, the China Automobile Dealers Association. CADA reports that 6.05 million used cars were sold in 2014, an increase of 16.33 percent over the previous year. However, new car sales were much higher: 23.5 million new vehicles were sold in 2014. In the same year in the U.S., by contrast, sales of used cars were 43 million, according to Automotive News—more than 2.5 times the number of new cars. This is a strong indication that the Chinese used car market is likely to grow very quickly in coming years.