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(Photo source: Visual China)

Blue Whale News, August 14 (Reporter Shao Yuting)Since the transformation began in 2019, there have been frequent reports of an IPO for Chehaoduo Group, the parent company of Guazi Used Cars, the largest used car e-commerce transaction and service platform in China.

On August 14, it was reported that Chehaoduo Group plans to go public in the United States as early as this year, aiming to raise about US$200 million. The report said that the transaction could take place as early as this year and is currently working with financial advisors.

In this regard, Blue Whale reporter visited Chehaoduo Used Motor Vehicle Brokerage (Beijing) Co., Ltd., and the relevant staff told Blue Whale reporter that "the internal staff has never heard of this news." The relevant staff of Sequoia Capital told Blue Whale reporter that it was not convenient to accept the interview, and that the reporter could pay attention to the official news released by the group.

According to the official website, Chehaoduo Group is China's leading one-stop platform for automobile consumer services. It has three major business segments: Guazi Used Cars, Maodou New Cars, and Guazi Auto Repair. It provides users with new and used car trading services, auto finance, insurance brokerage, after-sales protection, repairs and maintenance, and other full-industry chain services, meeting all users' needs throughout the life cycle of their cars in one stop.

Chehaoduo, formerly known as Guazi Second-hand Car Direct Sales Network, was officially launched in 2015, with its main business being second-hand car transactions. The slogan "No middlemen to make a profit" captured the pain points of the opaque second-hand car prices and chaotic trading market at the time. In 2017, Guazi Second-hand Car Direct Sales Network announced that through the integration of existing businesses, the company will be upgraded to Chehaoduo Group. As the parent company, Chehaoduo wholly owns two independent brands, Guazi Second-hand Car Direct Sales Network and Maodou New Car Network.

In recent years, with the cancellation of the migration restriction policy, used cars can circulate freely across the country, the supply of cars has been opened up, and the market has changed from a seller's market to a buyer's market. According to statistics from the Ministry of Public Security, as of the end of June 2024, the number of cars in the country has reached 345 million, and the supply of used cars has increased significantly.

Yang Haoyong, CEO of Chehaoduo, believes that "now users who buy used cars no longer need to focus on whether they can get a car at a good price, but rather on how to buy a good quality car with so many cars." Therefore, since 2019, Chehaoduo has focused on exploring new models.

According to reports, in 2019, Chehaoduo cut its car rental business and transformed its after-sales business into a franchise model. The last round of financing of US$300 million was mainly used for Chehaoduo's e-commerce exploration, gradually shifting from the original semi-e-commerce model of online car viewing and offline transactions to a comprehensive e-commerce model of online transactions and offline fulfillment. The company also connected with third-party car dealers to expand the source of cars and transform to a platform model.

Last year, Yang Haoyong, CEO of Chehaoduo and founder of Guazi, said in an interview, "In the past two years, we have been working on the second-hand car e-commerce. At one point, the financial figures were very bad. Car dealers were offline in large numbers. We had to provide various subsidies, and users questioned that they could not see the cars."

In order to solve new user pain points, Chehaoduo launched online vehicle inspection, official inspection and "7-day test drive" services, in addition to the lowest price of 199 yuan, free shipping for 300 kilometers, and the fastest next-day delivery. In addition to subsidizing users, the company also subsidizes car dealers. In order to cultivate car dealers, the company does not charge commissions, but also bears logistics costs, and even pays car dealers for car rental fees during the delivery process.

"During the epidemic, our business was temporarily suspended. Today, we have sorted out various things and finally got back to a position where everything is in its proper place and running smoothly." Yang Haoyong said, "This time we are starting from scratch, which is a big challenge for the team and organization."

Since the transformation began in 2019, Chehaoduo has been repeatedly rumored to be planning an IPO.

In 2020, an investor close to Chehaoduo Group revealed to the media that Chehaoduo plans to list on the U.S. stock market in the fourth quarter of 2020. The funds raised will be used for marketing promotion, R&D investment, store upgrades, quality management, and supplementary operating funds.

In 2021, there were rumors that Chehaoduo was considering listing in Hong Kong and raising at least US$100 million. The funds raised would be used for marketing promotion, R&D investment, store upgrades, quality management, and replenishment of operating funds. Later, the media quoted Chehaoduo's response that the financing and IPO news were untrue.

Tianyancha APP shows that as of now, Chehaoduo has received 9 rounds of financing. The last round of strategic financing took place on June 10, 2021, with a transaction amount of US$300 million, of which US$200 million was led by H Capital, followed by Sequoia Capital China Fund and IDG Capital, and US$100 million was personally invested by the group's CEO Yang Haoyong. Including this round of financing, Chehaoduo has raised a total of nearly US$4 billion. After the last round of financing, Chehaoduo's valuation exceeded US$10 billion.