China ride-hailing firm Didi Chuxing seeks bite of booming used-car business with Renrenche investment
The deal will also help Renrenche expand by allowing it to sell through Didi’s app, potentially reaching some 17 million drivers
China’s answer to Uber, Didi Chuxing, has injected US$200 million into online second-hand car trading platform Renrenche, giving it a foothold in the lucrative used-car business and allowing Renrenche access to Didi’s huge customer base.
Renrenche, the third-largest used-car trading platform in China, said on Monday it would use the money to accelerate its strategic expansion, and expects to soon be able to offer its services through Didi’s smartphone app as part of the deal.
“More than 400 million passengers and 17 million drivers are expected to be added to our customer base on the closing of the financing,” said Li Jian, co-founder and CEO of Renrenche.
“This will bring us a huge edge in terms of resources,” he said.
Didi’s investment is the latest sign that companies are betting big on the used-car market in China, especially after several positive signals from the Chinese authorities, who have been introducing measures to facilitate the trading of second-hand cars since last year.
Guazi.com, China’s largest used-car trading site by sales volume, said in June that it had secured a new round of financing worth US$400 million, while Youxin, the second-largest platform, closed a US$500 million funding series in January that was led by TPG Growth, Jeneration Capital and China Vision Capital.
Renrenche operates in over 80 Chinese cities and lists more than 100,000 cars on its website and app. It has previously received funding from internet giant Tencent and Shunwei Capital, backed by Lei Jun, the founder of smartphone maker Xiaomi, as well as from Beijing Prometheus Capital, which is led by Wang Sicong, son of property billionaire Wang Jianlin.
Beijing Prometheus took part in the company’s series D financing that raised around US$150 million last year.