Chinacars Inc, which provides an online community to auto consumers, received
a US$25 million funding from an investor group led by Goldman Sachs, the
Beijing-based company said in a statement.
Investors' confidence in the Website (chinacars.com) is due to the perfect
combination of the two hottest sectors in the country - Internet and cars,
industry insiders said.
The Website, founded in 2001, provides a stream of products and services,
including a purchase guide, ranking of repair shops, car accessory information
and other services that help drivers with vehicle decorations, insurance, repair
service and a real-time map online, to attract 1.5 million registered users.
Following the latest investment, David Chou of Goldman Sachs will join
Chinacars' board of directors, according to the statement released late on
Friday. US-based venture capital fund Granite Global Ventures, which injected
US$8 million into Chinacars in a previous investment, is also among the
investors this time round. China Renaissance, a Beijing-based investment
advisory firm, acted as the exclusive financial adviser and placement agent to
Chinacars, the statement said.
"We believe in the potential of combining the cost advantage of Internet
technology and the market size of China's post-sales auto services market,"
Chinacars' Chief Executive John Zhang said in the statement.
In 2005, the Website posted a revenue jump of 50 percent year on year to more
than 100 million yuan (US$12.5 million). Auto advertising and commission fees
from partners like insurance and car repair firms mainly fueled the rise, the
Website said.
China is set to have more than 200 million Internet users from the current
123 million, said iResearch Inc, a Shanghai-based Internet consulting firm.
In the first half, venture capital investment in the Internet sector was
US$276 million, surpassing the level in the whole of 2005. Internet-related VC
investment accounted for 35 percent of total VC investment in China in the
period, ranking it as No. 1, Zero2ipo Inc, a Beijing-based VC advisory firm,
said in a report.
Besides the Internet boom, car sales in China also boosted the Website's
revenue.
(For more biz stories, please visit Industry Updates)
