This is the third investment that Tencent and JD have made in the company
Bitauto Holdings, a leading automotive information service in China, announced on Tuesday a US$550 million strategic investment from a consortium comprised of Tencent, Baidu and JD.com.
A company statement noted that the investment would be made in cash, and go toward Bitauto’s e-commerce-related automotive financing platform Yixin Capital.
Yixin Capital said the combination of data, users, and capital resources will help them perform more accurate and efficient credit evaluations and improve their ability to provide financing products and services to targeted customers.
This is the third investment that Tencent and JD have made in the company. After a US$1.5 billion investment in early 2015, the two internet giants, along with Baidu, participated in a US$300 million round in Bitauto in June.
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Upon completion of the deal, Bitauto will hold a roughly 47 per cent equity stake in Yixin Capital. The company did not disclose the shares each investor would take after this transaction. In June, Tencent, Baidu and JD took 7.1 per cent, 3.2 per cent and 23.5 per cent of the company’s shares, respectively.
The growth of China’s car market has fueled a handful of related sectors in recent years, including second-hand car trading and electric cars. Online auto loans have also prospered along with China’s internet finance boom.
Compared with developed markets that boast average penetration rates above 50 per cent, China’s auto finance penetration rate is relatively low, recorded at just 20 per cent in 2014, according to research from Deloitte. The research institute expects the country’s auto finance penetration to reach 50 per cent by 2020.
Autohome, a major rival of Biauto, has undergone a major boardroom tussle earlier this year while Telstra Crop., a leading shareholder of the company sold a 47.7 per cent stake to Chinese insurance tycoon Ping An.
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The article Tencent, Baidu, JD.com Double Down On Bitauto With $550M Investment first appeared on Technode.
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