Chinese online car trading platform Chehaoduo announced Wednesday that it has raised USD 200 million in a follow-on round to its Series D from SoftBank and Sequoia China, totaling its Series D round to more than 1.7 billion dollars with 1.5 billion coming from SoftBank’s Vision Fund in early 2019.
Owning more than 600 offline stores as of February 2019, Chehaoduo is known for its second-hand vehicle platform Guazi.
The latest fundraising round gives Chehaoduo a needed boost. The Beijing-based firm cut employees’ salaries by 30-50% in February 2020, while the COVID-19 outbreak caused sales of second-hand vehicles in China to slump 91%.
Besides rejuvenating business in the post-pandemic era, the capital raised will also be allocated to after-sale services and bolstering synergy between Chehaoduo’s second-hand platform Guazi and new vehicle brand Maodou.
While the company initially focused on fast expansion across China, Chehaoduo shifted its focus in the latter half of 2019 to improving operational efficiency and providing full-cycle offerings from purchases to after-sales services.
As a result, Chehaoduo claimed to have turned a profit in 2019 Q4, “the latest financing is a recognition of the firm’s risk resilience under the global coronavirus outbreak,” said the same announcement.
According to a report from iResearch, increasing market demand, as well as car ownership, boost investment in China’s used car market since 2012.
Chehaoduo, as one of Chinese VCs’ favorites, ranks the 25th on Hurun’s 2019 Global Unicorn List with a valuation of USD 8.5 billion.