Goldman Sachs leads US$300 million investment in China’s second-hand car sales platform Renrenche

Goldman Sachs will lead a US$300 million investment in Chinese used car sales platform Renrenche, injecting fresh capital into a market that has seen private car ownership in the country surpass 210 million. 

Didi Chuxing and Tencent – currently the platform’s two top institutional shareholders – will also take part in the latest funding round, according to a statement issued by Renrenche on Thursday.

The investment will allow the company to hire additional people and invest in new technology to raise the entry barrier for the car sales business, the statement said. 

Second-hand car sales have picked up in China over the past few years in tandem with the sale of new cars, helped by supportive policies such as the easing of rules on auto loans and as the internet and popularity of e-commerce combined to allow shoppers to compare prices. Last year, 12.4 million used cars were sold in the country, up 19.3 per cent year on year, according to the China Automobile Dealers Association. 

The boom has convinced some of the country’s biggest tech giants to invest in the industry. Alibaba Group Holding, parent company of the South China Morning Post, is now the biggest investor in SouChe after leading a US$335 million funding round for the start-up in November. Tencent Holdings has backed both Renrenche and Chehaoduo, with the latter, formerly known as Guazi, closing a US$818 million funding round led by the social media and entertainment giant.