Alibaba Group Holding Ltd. led a $335 million Series E funding round for Chinese car trading website SouChe.com, hinting at the e-commerce company’s auto finance ambitions.
SouChe (meaning “Search Car” in Chinese) sells used cars from dealers across the country and provides financing for customers to buy new vehicles for a year, which he or she can then purchase outright, trade in for a new model, or hand back.
This latest round is less than 12 months from the $100 million Series C round in November 2016 led by Ant Financial, an Alibaba affiliate, according to a SouChe company statement. Alibaba will also become the biggest investor of SouChe, the release said. The two companies will integrate business resources and incorporate Alibaba’s e-commerce, in addition, to jointly building a new retail and new finance platform for automobiles.
In the meantime, SouChe will work with Ant Financial on new car financing to develop financing products and services using Ant’s “strong data and risk control capacities,” according to the statement.
Ant Financial has previous experience within the auto finance world, having provided $7.3 billion to assist in financing electric vehicles in May.
Additionally, SouChe is looking at a possible U.S. IPO next year, Yao Junhong, SouChe’s founder, said in a published report.
“We are considering a U.S. IPO for next year, potentially towards the end of the year,” Junhong said. “But our finances are strong so we may not have to do it.”
SouChe made $13.7 billion in the first nine months of 2017, in gross merchandise volume, Junhong said in the statement; t. The projected 2017 gross volume is approximately $22.6 billion. Founded in November 2012, SouChe is connected to 110,000 car dealerships in China, or over 60% of the market.
