Car aftermarket site raises $80m

Shenzhen-based auto parts platform CassTime completed its first round of Series C funding, totalling $80 million, on Thursday.

Sequoia Capital China and Source Code Capital jointly led the investment, along with existing investor Hua Partners. China TH Capital is the exclusive financial advisor of this deal.

The Chinese have bought a large number of cars over the past few years. It has the second-largest car inventory in the world and the number of vehicles in the country reached 240 million by the end of last year, according to a report from Deloitte. China’s car ownership might even surpass that of the US in 2020.

But this fundraising is aiming at a transition period in the car industry itself. New car sales shrank last year – the first time in the past few decades. People who already own a car would rather replace components than buy a new one.

Vehicle maintenance and repairs have become a hot business. Fundraising in the automobile aftermarket peaked in 2016 with 143 investments made in the sector. Enthusiasm has cooled and fundraising in the car aftermarket slipped to 103 in 2018.

Chinese investors want to build a car aftermarket like the one in the US. China's automobile system standards, however, have struggled to keep up as new models are launched with entirely new specifications every year. And most workshops in China must deal with many different cars from many vehicle-making countries.

“The lack of credit and standards in the complex auto parts industry leads to a long and inefficient trading process,” Nathan Fu, director of China TH Capital told FinanceAsia. “The best solution is to construct a data-driven supply chain service, and that's what CassTime is working on.”

CassTime provides a business-to-business trading platform for auto parts suppliers while tracking and analysing all the data. It helps workshops find auto parts, using vehicle identification numbers to search for suitable components. On top of that, CassTime also matches mechanics, and offers supply chain financing and delivery services for its customers.

“We are an open platform. CassTime welcomes any supplier that can offer high-quality services,” founder and chief executive Overmars Jiang said.

CassTime completed its $92 million Series B fundraising last year from Fosun RZ Capital, Shunwei Capital, Hua Partners and Future Capital. To date, the company has raised nearly $200 million.