- Jack Lau
US$550M Investment by Tencent/Baidu/JD into BitAuto
The number is such so huge sometimes. Over the past weekend, a post IPO funding round was announced in which a group including Tencent, Baidu, and JD, pulled together a round of US$550M into BitAuto, a New York Stock Exchange listed company.
BitAuto was founded in 2000, providing e commerce and information to auto buyers and sellers. The market capitalization today is roughly about US$1.8 billion with a revenue of RMB $4 billion last year, a seriously large revenue.
A great number of things are noticeable:
Entrepreneurs around the region should really note (again) the enormity of the China market (what a cliché I know). BitAuto is not the only player in this field. There is AutoHome, which was also listed on the NYSE. AutoHome also hits a revenue north of RMB $3 billion a year. AutoHome went public at the end of 2013, while BitAuto went public in 2010. And, at a round of US$550M is very significant. Just to show the enormity, while this is really not an apple to apple comparison, in the last quarter, venture fund in China was US $1.8B, in India was US$891M , in South Korea was US$45.8M. (Yes, there is a serious difference between VC and a round to of funding for a US$4B revenue listed company.) But, still there is a comparison.
Another observation is that again we see the investors as Tencent and Baidu. The willingness and the deep pocket of these companies greatly outstrip their counter parts. If you may recall, Tecent just paid US$8.6 Billion for a controlling stake of the game owner of the Clash of Clan a few months ago. And, Baidu, is a key player in the Didi-Uber deal. Baidu started investing in Uber in 2014/5. Baidu led a round of US$1.2B in Uber.
But, I suppose the more interesting thing about the latest round of BitAuto was to look back and said to oneself, the sheer numbers of the supersized companies that were founded by young entrepreneurs at the turn of the millennium. (More on this later.)