Renrenche was once a Chinese unicorn startup with a valuation of billions of US dollars supported by Goldman Sach Group and Tencent Holding. But now this startup is only valued at US $ 1,000.
Renrenche is a startup that has an e-commerce platform for buying and selling used cars in China. Two years ago, this startup was valued at US $ 1.4 billion or held unicorn status. Now they want to sell their main assets to 58.com Inc (the leader of China’s online classifieds market). The price is US $ 1,290, as quoted from Fortune, Thursday (29/10/2020).
What happened to this tartup?
So what happened at this startup? Renrenche was founded in 2014. The idea of this startup is to connect used car owners with potential buyers at a lower fee than offline car dealers.
The strategy of burning money by attracting small revenues made this service booming in China. They even had time to collect investor funds of US $ 300 million. Even China’s ride-hailing giant, DiDi Chuxing is one of the investors.
However, intense competition with Uxin Ltd and Guazi.com. Which is supported by the Softbank Vision Fund coupled. And also with the Covid-19 pandemic has left companies running out of money and having difficulty raising funds from investors.
Even one of its creditors, Argyle Street Management Ltd sued the Chinese startup for bankruptcy in a court in the Cayman Islands, where Renrenche is registered, on the grounds that the company was unable to pay off its US $ 15 million debt.
So, the sale of assets to 58.com Inc is one way to solve the company’s liquidity problem. Reportedly, Renrenche investors are looking for a solution to save the company.
Until this news was published, Renrenche refused Fortune’s request for confirmation. Renrenche’s representatives answered requests for confirmation by saying that the offer to purchase assets and loans to Renrenche had received support from Tencent and DiDi.