SoftBank's Vision Fund is entering into the end part of negotiations to invest $1.5 billion in Guazi, a China-based used vehicle trading platform, that would place a $8.5 billion valuation in the company
Sources around the discussions believe the deal will be finished and announced some time within the next couple of weeks.
This investment would be the second time Softbank's Vision Fund has invested in a used vehicle platform. Just last year they put €460m into Auto1 out of Germany, evaluating the company at €2.9 billion.
Guazi is a peer-to-peer platform that puts buyers with sellers within China's car market. The company has been accused recently by rival Uxin of falsifying data but these accusations haven't been proven.
Guazi also runs 58.com, a holding company that has several online classified sites and listing platforms.
This investment would be another investment in a Chinese company from Vision Fund. The $100 billion fund is backed mostly by the government of Saudi Arabia and Abu Dhabi.
Vision Fund and Guazi did not comment about the possible investment.
This investment is coming as China's new vehicle market is slowing thanks to less government subsidies, US trade sanctions, and lower consumer confidence. Sales of cars in China saw their first decline in nearly 30 years in 2018.
In response to the allegations Guazi said that Uxin had misunderstood its business model and rejected Uxin’s three allegations, saying it used big data and AI to determine pricing and car selection and that its sales promotion strategy was based on its financial regulations.
“There has been no fraudulent behaviour, nor any behaviour that harms the rights of consumers,” it said, to the Chinese media.
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