Chehaoduo Group, the parent company of Guazi.com, China's largest used-car dealer, and Maodou.com, announced on Thursday a $1.5 billion investment from the SoftBank Vision Fund.
The group’s estimated value will surpass $9 billion after the fundraising, ranking first among China's car service sector.
Proceeds from this new round of fundraising will support Chehaoduo’s investments in technology to drive innovation in the sector, and develop new products and services across an increasing spectrum of customer needs. The group also intends to expand its marketing capabilities and open offline stores to enhance new business activities.
Mark Yang, CEO of Chehaoduo Group, said "The global automotive industry is experiencing unprecedented change and creating great opportunities at the same time. The application of big data and artificial intelligence is the key to fundamental reform of automotive retail in China."
In the past three years, the company has been combining in-depth big data analytics and AI technology to implement standardized evaluation and intelligent pricing mechanisms for China’s highly fragmented and unregulated used car market.
Furthermore, through continuously innovating across its product, service, and data platforms, the company has significantly reduced barriers to purchase a new car for consumers as well. This includes pioneering new models in down payment purchasing, establishing closed-loop integrated automotive services of used car, new car and after-market services via over 600 physical stores, and building a new data-driven retail eco-system.
Eric Chen, partner of SoftBank Investment Advisers, said "China’s used car market is growing rapidly but online penetration remains low, and auto financing is underutilized compared to developed markets. Chehaoduo Group has a bold vision with technology at its center to underpin an industry network that will support transformative growth of the market."
Market insiders said that the competition in the used-car industry has ended, and the market pattern is already set, with Chehaoduo Group taking a dominant role. It has accumulated a total of $3.8 billion worth of development fund, 2.7 times and 5 times of its rivals Youxin and Renrenche, respectively. As an industry leader, the company has entered a stage of high integration of online and offline and technology-driven new retail mode.
"Chehaoduo Group is committed to promoting industrial improvement through technology reform and becoming the new engine to drive the future of automotive retail in China. Our vision is to help families in China to be able to own a better car. The support of the Vision Fund not only strengthens the Group’s capital base, but also has the potential to boost our big data and AI innovation capabilities, which can be applied to the whole automotive retail value chain.
"In the future, the infrastructure and service of the entire sector will be significantly reconstructed by data technology innovation, promoting continuous improvements in service efficiency and consumer experience," Yang added.
