Wednesday, 2024 July 24

China’s CARS group raises $162m Series C+ to compete with market leader Renrenche

China’s CARS Group (车好多集团, an automobile online retailer) recently raised a US$162 million Series C+ round, bringing its total funds raised to US$2.3 billion.

After the latest financing, the company is now standing at a valuation of US$6.6 billion – three times the size of its  US-listed counterpart UXIN, and five times the valuation of another competitor, Renrenche.

The new ammunition, according to CARS, will be used towards experimenting new retail, including the roll-out of offline Guazi used-car boutique stores and Maodou chain stores for new cars. The funding will also be used to invest in big data, AI and smart device technologies. CARS might be facilitating an O2O business model that consisting of both the sales and rental of new and used cars, which is an obvious move to leverage on technological advances to catch up with Renrenche.

According to market researcher iMedia research, Renrenche is the market leader in terms of brand recognition and consumer satisfaction among other metrics, and as of this August commands a market share of 46.7% in terms of online used-cars sales.

It’s worth noting that both CARS and Renrenche have raised funding from Tencent. Additionally, CARS was also financially supported by Alibaba while Renrenche, on the other hand, received funding and technologies props from Tencent-backed Didi.

While Renrenche is the present market leader, but it lacks the momentum in rolling out physical channels which require heavy capital input as well as in tech investment. Its backer Didi itself got caught in a turmoil this year and might have to reduce its support. It’s very likely that CARS will excel in this game of funding and technology development.

KRA Comment: UXIN had to get listed on the public market at a loss due to the primary market liquidity crunching, while Renrenche barely managed to raise US$ 385 million in financing.

On the other hand, CARS appears to be the VC darling in its vertical at the moment. For next, it has to prove that whether it could compete with Renrenche in the rental business.

36Kr Global Writers
36Kr Global Writers
The tech ecosystem is roaring. Unicorns valued at billions of dollars have emerged worldwide, while venture capital and strategic investors are constantly on the lookout for the next big thing. 36Kr Global is committed to establishing ties between global stakeholders and providing the most vital information about China’s tech scene and capital markets.

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