Used-car sales platform Renrenche has scooped $85 million USD in Series C funding from Tencent. The company, which was founded by a series of ex-Baidu employees, now has a valuation of $ 500 Million USD.
Founded in April 2014, the company received $5 million USD series A funding from Redpoint Ventures and launched its services in July in Beijing, Guangzhou and Shenzhen.
Only five months later the Beijing-based company announced US$20 million in B series funding, valued at $ 150 million USD. It was led by Ceyuan Ventures and Shunwei Ventures, the venture capital fund backed by Xiaomi CEO Lei Jun and existing investor Redpoint Ventures also participated in the funding.
Renrenche carries out C2C virtual consignment to perfomr transactions of used cars, acting as a middleman and taking a 3% commission for service fee. The one-year-old company claims that it now runs in 20 cities, with 15,000 secondhand cars on sale. In July, 3000 cars were traded, with the company taking a reproted 100,000 RMB per car on average.
Why Did An Ex-Baidu Founder Shake Hands With Tencent?
Renrenche founder and CEO Li Jian was previously Baidu’s merchandise director, while several of Renrenche’s core members are also ex-Baidu employees. Baidu was also communicating with the company on this round of funding, however the team ended up choosing Tencent, saying “We believed that what Tencent can offer us would be much bigger (than Baidu); not only in funding but in potential resources like mobile traffic, social interaction and internet funding from WeBank,” Li Jian said. Tencent-backed Webank is China’s first private commercial bank established as well as China’s first online-only bank.
Li regards believes the second hand car market has reached a saturation point. “From the later half of 2013, getting investment was rather easy, the following year 2014 was the easiest. If you launch a pretty good business idea and the team is not so stupid, everybody can get investment. At the same time, investors are fussy and picky about the team and business model. I haven’t heard of any new players in the market this year,” he noted.
In the beginning of 2015, BAT increased their collective investment in the automobile market. In January, Tencent and Jingdong jointly invested in Easy Car, which includes a secondhand car business. In March, Baidu invested in Youxinpai, a company Tencent invested in back in 2013. In April, Alibaba announced the integration of its automotive business and second hand car trading platform. Since then, Baidu placed particular emphasis on the automobile industry and invested in Uber, followed by investment in 51 Yongche and Tiantian Yongche, while Didi and Kuaidi famously ended their rivalry by combining resources.
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