SoftBank Vision Fund Bets $1.5 Billion on China Used-Cars Giant
(Bloomberg) -- SoftBank Vision Fund is investing $1.5 billion in Chinese car trading platform Chehaoduo Group, placing another major bet on the world's largest automobile market.
The investment values Chehaoduo, the parent of online sites Guazi and Maoduo, at more than $9 billion, a representative for the startup said. It intends to use the money to develop technology in data and cloud computing, the company added in a statement.
SoftBank Group Corp. and its Vision Fund, the world's single largest pool of tech investment capital, have poured billions of dollars into the world's second largest economy. They're a backer of Didi Chuxing, the ride-hailing service that ran Uber Technologies Inc. out of the country, as well as social media giant Bytedance Ltd. and AI player SenseTime Group Ltd.
Chehaoduo, backed by social media and gaming giant Tencent Holdings Ltd., competes with the likes of Uxin and Souche in a segment that's remained largely resistant to disruption. Dozens of startups -- including Chehaoduo and Didi -- are now trying to employ artificial intelligence to help users compare pricing, secure auto-financing and gain access to after-market services. Chehaoduo said it will improve services in down payments, second-hand car trading and after-market services via more than 600 physical stores.
“The global automotive industry is experiencing unprecedented change,” Mark Yang, Chehaoduo's chief executive officer, said in the statement. “The application of big data and artificial intelligence is the key to fundamental reform of automotive retail in China.”
Read more: Carmakers Can't Count on China to Solve Their Growth Problems
The investment adds to SoftBank's growing portfolio. Its Vision Fund has taken stakes in more than 70 startups around the world including Uber and shared-office giant WeWork Cos. In China, its investments include logistics operator Full Truck Alliance Co. and online education startup Zuoyebang.
“China's used car market is growing rapidly but online penetration remains low and auto financing is underutilized compared to developed markets," Eric Chen, a partner at SoftBank Investment Advisers, said in the statement.
--With assistance from Pavel Alpeyev.
To contact Bloomberg News staff for this story: Lulu Yilun Chen in Hong Kong at ychen447@bloomberg.net;David Ramli in Beijing at dramli1@bloomberg.net
To contact the editors responsible for this story: Robert Fenner at rfenner@bloomberg.net, Edwin Chan, Peter Elstrom
©2019 Bloomberg L.P.
With assistance from Bloomberg
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