Chinese online second-hand car seller Renrenche denied the rumor of its bankruptcy and claimed to call the police, as it is pouring more money to grab potential customers amid an escalated local battle, our sister site Technode Chinese reports.
Rumors about the company going broke with massive lay-offs began circulating on Chinese social media on Monday. According to Weibo user @Auto_lover黄加祖, employees of the company have been fired at a number of local branches, including those in Shanghai, northwestern Chinese city of Xi’an, and southwestern Chinese city of Guiyang.
Renreche immediately dismissed the rumors in a Weibo announcement (in Chinese), saying all its businesses are running normally and that it has reported to police with the relevant evidence.
Later that day, Li Jian, founder and CEO of the company announced a round of strategic upgrades, setting up a special fund of RMB 80 million (roughly $12 million) to support underwriters—employees willing to subcontract a piece of car selling business for the company. In a statement sent to TechNode, Li added more “new retail shops” will be opened in 2019, offering one-stop services to subcontractors for car selling businesses.
Founded in 2014 by Li Jian, a former executive at Baidu and Microsoft, the Beijing-based online car-selling startup has won the support of several tech giants. In August 2015, Renrenche raised $85 million in Series C funding led by Chinese tech titan Tencent. This was followed by another round of funding totaling $300 million in April 2018, including investment bank Goldman Sachs and ride-hailing firm Didi, alongside Tencent.
China’s used car online sector has seen increased competition, as local players move into the offline market amid public and legal disputes. For example, Softbank-backed Guazi lost an appeal in 2017 filed by Renrenche for misleading marketing and was later accused by a rival, Nasdaq-listed Uxin, of using fraudulent data in financial reporting.