BIZCHINA / Overseas Investment
Goldman-led investors fuel Chinacars' future
(Shanghai Daily)
Updated: 2006-08-29 15:27
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)
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