BEIJING – Guazi.com, an online C2C used car trading platform, has completed its initial round of financing worth $204.5 million, the most any online used car trading platform has ever received, the company announced on March 30.
The lead investors of this round include Sequoia Capital China and Guangxin Capital. The company also received backing from Shanxing Capital, Weilight Capital, Star Angel Fund and several other investment institutions.
Yang Haoyong, CEO of Guazi.com, said that the final size of this round is expected to reach $250 million at a valuation of over $1 billion. With the new funding, the company plans to expand its market, improve vehicle valuation system, and enhance user experiences. Besides, part of the funding will be used for the integrated layout in the aftersales services market and auto financing will obtain a significant investment.
“This round of funding demonstrates the capital market’s confidence and recognition for used car market as well as for the company. Guazi.com aims to drive its service innovation and upgrading with the new funding,” said Yang.
As Guazi.com continues to expand, it is expected to cover 100 cities in China at the end of 2016, with its transaction value exceeding ¥20 billion ($3.1 billion) and employees reaching 8,000. It will further provide over ¥2 billion in loans for users, and connect its aftersales service chains of used cars.
Sales of used cars in China have increased tremendously in recent years. According to China Automobile Dealers Association (CADA), there were over 9.4 million used car transactions in 2015. It is estimated that by 2020, transaction volume will exceed 20 million units valued at over ¥1 trillion.
Ye Yuming, partner of Guangxin Capital, said China’s used car industry is experiencing unprecedented transformation, which presents enormous business opportunities. “We look to Guazi.com’s growth potential in the used car market,” said Ye.
Guazi.com was established by online classifieds site Ganji.com, which later merged with rival site 58.com. The used car trading platform then spun off from the combined parent company 58Ganji Group last November to facilitate faster growth.
As a C2C used car trading platform which directly links individual car sellers and buyers, Guazi.com provides a full suite of value-added aftersales services, including vehicle financing and auto insurance.
Last year over 50,000 car owners sold their cars through Guazi.com with total sales of over ¥3.7 billion. Currently, Guazi.com has more than 4,000 employees with coverage in 75 cities. Statistics show that its real-time number of vehicles for sale has reached 50,000.