Investors

KKR taps into Chinese online car market

The firm has teamed up with two other firms to invest $170m in online used car auction company Uxin

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KKR has tapped in to the Chinese online car market by backing Uxin, an online used car auction company, according to a statement.

The US-based firm teamed up with China’s search engine business Baidu and investment firm Coatue to invest $170 million in Uxin.

This funding round, which closed this week, will be used to expand Uxin’s platform into the B2C used car market. Earlier this week, the company launched Uxin Used Car, a B2C platform that will connect auto retailers and used car buyers across China.

It is unclear how much KKR has exactly invested in the deal. A spokesperson did not immediately respond to a request for comment at press time. KKR has made the investment using capital from its China Growth Fund, a $1 billion vehicle that was raised in 2010, according to PEI’s Research & Analytics division.

Uxin, which was founded in 2011, employs more than 1,000 people in 50 Chinese cities, who inspect and certify the quality of used vehicles for sale on Uxin’s platforms. Uxin makes use of its proprietary “CheckAuto” system and advanced vehicle identification capabilities to ensure the quality of vehicles sold through the platform.

Uxin’s existing B2B platform, Uxin Pai ranks as China’s largest used car auction site, with a 47.8 percent market share in online used car transaction volume in the first half of 2014, according to iResearch. Uxin handles over 150,000 annual transactions through its online and on-site auction platforms.

“China’s online used car market is set to boom in the coming years, and KKR is very positive about this industry and about Uxin, given the excellent performance of its B2B business. Uxin’s expansion into the B2C e-commerce segment comes at an important time for China’s used car market,” Julian Wolhardt, a member of KKR, said in the statement.

Total transaction volume on the Chinese used car market was RMB368 billion (approximately $58 billion) in 2014, representing 26.03 percent growth from 2013, according to CADA, the China Automobile Dealers Association. KKR expects this growth to continue, the firm said.