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Used Car Trading Platform Mychebao Announces $50M Series B Funding
Chinese used car trading site Mychebao, or Chezhibao in Chinese, has announced the completion of a 300 million RMB ($50 million USD) Series B financing led by Jiuding Capital and Addor Capital and followed by Gobi Partners, Nanjing Venture Capital and Bank of Nanjing. The company’s $10 million USD A round was received from sole investor Gobi Partners in September 2014, who are also an investor in Technode.
This latest round will see them expand into new markets, optimize operations in current markets, improve the company’s trading platform, bring on new talents and establish second-hand auto retail financial services, according to the company.
Mychebao is a Chinese second-hand auto trading platform, dedicated to providing consumer-to-retailer (C2R) transactions. After receiving applications from car owners, Mychebao will send its auto experts to appraise second-hand cars offline. The appraisal process, which usually takes around 15 minutes, is conducted according to the company’s home-brew VPQS (Vehicle Performance Quality Standard), which include a total of 1027 testing items and is formed by giving consideration to the valuation systems of China, U.S. and Japan. Back-end auto experts will double check the data collected and the system will generate a score for the cars.
On the platform, both car dealers and regular consumers can make offers to car owners through a bidding system. Mychebao holds five auctions per day, while each bidding session takes 30 minutes. The startup also provides some after-sales support. The site will collect a 3% transaction/service fee upon the completion of each transaction.
Founded in 2012, Mychebao now operates in 12 cities, including Beijing, Shenzhen, Hangzhou, Chongqing and Nanjing, and plans to expand operations to cover over 50 cities with the new funding. The site currently has a monthly transaction total of 5,000 deals.
Second-hand cars, though generally considered as a risky business, is increasingly favored by China’s rising middle class. Huang Le, founder of Mychebao, expects China’s used car market to record another big boom in the second-half of 2015. China’s new automobile sales recorded a landmark 48% surge in 2009. While these new cars are about to reach an average 5-plus year life cycle, it is expected that more car owners will have plans to trade in their vehicles during this period.
Mychebao is up against a string of competitors in this field, big and small. Alibaba launched Taobao’s secondhand car trading platform in this year. Local listing services 58.com and Ganji.com rolled out similar services. Other startups in the emerging market include Youxinpai, Cheyipai and Renrenche.
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