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China TH Capital Honored as 'Best Venture Capital Deal' in FinanceAsia's Achievement Awards 2019

2019-12-13

FinanceAsia, an international authoritative media, announced the "Best Deals of 2019". China TH Capital, a leading investment bank in China was awarded the "Best Venture Capital Deal" because of its extraordinary transaction ability in the $1.5 billion equity financing of Chehaoduo (the parent company of Guazi.com, the largest used-car platform and Maodou). On the same day, China TH Capital announced the new vision - a world-class investment bank.

China's largest private placement deal in 2019

According to CapitalIQ, this deal is the largest private placement deal in China this year, the single largest deal in the history of China's second-hand car industry.

The Achievement Awards have the highest authority and a far reaching impact on the finance sector in Asia. They are set up for recognizing the outstanding corporates, investors and investment banks in developing Asia's capital markets. The award winners also included other international investment banks, such as Goldman Sachs, Morgan Stanley, Citigroup, including deals like Alibaba's $11.2 billion HK IPO, Bank of China's $3.8 billion bond deal and Indonesia's $2 billion green sukuk deal.

FinanceAsia editors presented the rationale for the decision as to why Chehaoduo's deal stood out: "After closing this round -- also the largest private placement deal in China this year -- Chehaoduo Group, the parent company of Guazi.com and Maodou.com, became China's largest used car and new car trading platform, the second largest in the word, and became the fastest company in the world's second-hand car industry to reach a valuation of nearly $10 billion.

Although it takes on average 10 months for a venture deal to complete in China, it only took Chehaoduo five months to close the deal. This is even more impressive given the complexity of the financing. China TH Capital did a great job to make this deal happen, matching both buyers and sellers' interests. There were more than 30 shareholders covering corporate venture capital, private equity funds as well as US dollar-and RMB-denominated funds, plus a sovereign wealth fund, all with different requests."

Since 2016, as Chehaoduo Group's exclusive financial advisor, TH Capital has helped the Company raise a total of more than 3 billion US dollars over multiple rounds of funding and participated in the investment. In the used car industry, the core problem of the whole industry's inefficiency is how to price used cars, the non-standard assets which are priced and negotiated on a case-by-case basis according to the conditions of individual cars. The injection of funding from this round made it possible for the Company to make long-term investment in R&D and algorithms, which is the key to enhancing pricing ability and operation efficiency and to continuously leading the industry in the future.

China TH Capital's new vision: a world-class investment bank

In the background of global economic structural transformation, Chinese capital and companies witnessed new opportunities.

Based on the in-depth research and transaction experience, China TH Capital has begun to empower global entrepreneurs, especially in emerging markets, since 2019. As financial advisor, it assisted deals in global emerging markets, such as India social media ShareChat and Southeast Asia used car transaction platform Carsome, in raising money from Chinese investors.

"The great company comes from the great times," Ruyi Guo, managing partner of China TH Capital, and the person in charge in Chehaoduo's deal. "Nowadays, since China has become the leading player of the global new economy, China TH Capital will embrace the new vision -- a world-class investment bank. We look forward to contributing more value to the world through empowering business leaders and building new generation business civilization."

Since its foundation in 2012, China TH Capital has served over 100 startups to raise more than US$17 billion in the primary market. Its long-term clients include Pinduoduo (NASDAQ: PDD), Yunji (NASDAQ: YJ), Soyoung (NASDAQ:SY), Cango (NYSE: CANG) and 51 Credit Card (2051.HK), Chehaoduo group, Zuoyebang.com, CHJ Automotive, G7, TuSimple, CassTime, SHEIN, ShareChat, Geek+, Knowbox, Xiaozhu.com, Aihuishou etc., which are all top leading players in new economy.

The rationale behind the deal from FinanceAsia editors is as below:

It is not often that venture financing completely disrupts an industry, but SoftBank’s Vision Fund bet on China’s auto market, did just that.

After closing this round – also the largest private placement deal in China this year – Chehaoduo Group, the parent company of Guazi.com and Maodou.com, became China’s largest used car and new car trading platform, the second largest in the word, and became the fastest company in the world's second-hand car industry to reach a valuation of nearly $10 billion.

"China's used car market is growing rapidly but online penetration remains low and auto financing is underutilised compared to developed markets,” said SoftBank partner Eric Chen.

Although it takes on average 10 months for a venture deal to complete in China, it only took Chehaoduo five months to close the deal. This is even more impressive given the complexity of the financing. China TH Capital did a great job to make this deal happen, matching both buyers and sellers' interests. There were more than 30 shareholders covering corporate venture capital, private equity funds as well as US dollar-and RMB-denominated funds, plus a sovereign wealth fund, all with different requests.

The company has become China's leading platform for integrated automotive retail services in the used car sector. It combines in-depth big data analytics and artificial intelligence technology to implement standardised evaluation and intelligent pricing mechanisms for China's highly fragmented and unregulated used car market.

Chehaoduo’s offline business includes more than 600 stores, which have formed a one-stop, closed-loop service use case for car consumption. By connecting its online and offline business, and driving its operation with data and synergy, the company reckons that it has built a new retail ecosystem for the car consumer service industry.

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