Bitauto receives $1 billion US from Chinese peers
20 Apr 2017
Bitauto Holdings Ltd. (NYSE: BITA), one of two Chinese auto sites listed overseas, raised around $1 billion U.S. from leading Chinese internet enterprises in a new round of financing. It plans to use the money to develop China’s largest online car-financing platform.
The capital will be injected by social media giant Tencent Holdings (HKSE: 700), online search machine operator Baidu Inc. (BIDU), and China’s largest e-commerce platform JD. Inc. (NASDAQ: JD), Bitauto’s CEO told Reuters on April 20.
CEO William Li Bin, who is also chairman of electric vehicle start-up Nio (formerly known as NextEV), did not elaborate on the fundraising. The money will flow to Bitauto’s unit Yixin Capital Ltd., where it will be used to grow the business in online automobile finance, and related transactions, a spokesman said.
Bitauto, which provides internet content and marketing services to China’s automotive industry, generated revenue of $619 million U.S. in 2016, 56 percent more than in the previous year. Its losses in 2016 amounted to $64 million U.S..
Chinese traditionally avoid taking out loans to buy cars, although consultancy Deloitte expects this to change, forecasting about 50 percent of cars will be bought on credit in China by 2020, as automakers aggressively push financing to increase sales.
In the United States, more than 80 percent of cars are bought on credit, Deloitte said.