Used car firm to raise funds via US float

Uxin Ltd, a Chinese used car e-commerce platform, has filed for a $500 million IPO in the United States, according to the company's regulatory filing.

The company plans to list on the Nasdaq stock market under the symbol UXIN. However, no pricing terms were disclosed. Morgan Stanley, Goldman Sachs (Asia), JP Morgan, China International Capital Corp and China Renaissance are the joint underwriters on the deal.

Founded in 2011 by Dai Kun, Uxin offers both business-to-business and business-to-consumer services. Its B2C platform Uxin User Car provides consumers with customized car recommendations, financing, title transfer, delivery, insurance referral, warranty and other related services. Its B2B platform Uxin Auction caters to business buyers, helping them source vehicles, optimizing their turnover and facilitating cross-regional transactions.

The company said it will continue to expand its nationwide footprint, further improve user experience on its platforms, reinforce its technology leadership through innovation, as well as pursue strategic alliance, investment and acquisition opportunities. Its major local competitors include Guazi.com Inc.

Uxin's used car sales platforms for individual car owners and dealers have 41 percent and 42 percent market shares respectively, according to market consultancy iResearch. The company had established more than 670 physical service centers in more than 270 Chinese cities as of March, according to its prospectus. The total number of used cars sold through Uxin's online platform increased from 377,777 in 2016 to 634,317 in 2017, a 67.9 percent year-on-year rise.

For the three months ended March 31, 2018, Uxin's revenues hit 649.4 million yuan ($101 million), an increase of 93.2 percent over the same period in 2017. Its net loss was 839.4 million yuan in the first three months of 2018, compared to a loss of 510.8 million yuan in the first three months of 2017.

As a leading player in China's used car trading market, the company raised $500 million in a financing round co-led by TPG, Jeneration Capital and China Vision Capital. An earlier $170 million C-round fundraising was led by Baidu Inc, global investment firm KKR and investment management firm Coatue in 2015.

China is the world's second-largest automotive market and is forecast to become the largest automotive market by 2023, according to iResearch. The used car transaction volume in China is expected to grow rapidly from 12.4 million in 2017 to 29.6 million by 2022.

"Demand for financing and after-sales services has emerged in the used car market. It is difficult for used car e-commerce platforms to achieve profitability in a short period of time," said Zhao Xiang, an analyst at Beijing-based internet consultancy Analysys.

Zhao said fierce competition in the used car market will continue, and small and micro-sized platforms will be muscled out.