PAG leads $100m funding for Chinese car auction website

Capital from the Hong Kong-based firm will be used to open another 100 car auction outlets.

PAG has led a $100 million Series C round for Chinese second-hand car auction site Chezhibao, according to a company statement.

Financial terms were not disclosed but buyout firm PAG is currently investing its second pan-Asia fund, PAG Asia Capital II, which closed on $3.6 billion in December 2015.

The firm’s investment will be used to expand Chezhibao’s presence in China.

Nanjing-based Chezhibao is an online platform that connects car dealers, owners and buyers. On the platform, dealers can make offers to car owners through a bidding system. Chezhibao holds five auctions per day and also provides appraisal services and after-sales support. The company operates in 15 cities including Beijing, Shanghai, Shenzhen and Chonqqing and plans to expand to 100 outlets with the new funding. Most recently, it acquired Shanghai-based second-hand car trading platform Youyiche.

China’s used car market is increasingly favoured by the middle class over new car sales due to a proliferation of online channels as well as the easing of rules on trading used cars. The China Automobile Deals Association estimates that by 2020, the number of second-hand cars traded will equal that of new car sales at 29.2 million.

Other private equity and venture capital firms are active investors in the industry with Chezhibao rivals Uxin Group backed by TPG, KKR and Warburg Pincus, while Renrenche is funded by China Minsheng Investment Group and Tencent Holdings.

PAG has about $16 billion in assets under management across private equity, real estate and absolute return strategies. Over the past year, PAG has invested over $500 million in China with the $200 million purchase of Chengdu-based Golden Apple Education Group and the $3.6 billion takeover of US printer company Lexmark along with a Chinese strategic partner. The firm also led negotiations that resulted in the merger of its portfolio company China Music Corporation with Tencent’s digital music division.