Baidu is a new investor of Bitauto Holdings. (Photo : Reuters)
Three of China's biggest firms--Baidu, JD.com and Tencent--are chipping in $50 million each as Bitauto Holdings recently announced a fundraising worth $300 million, TechCrunch reported.
The company, which is currently valued at around $1.4 billion, operates a giant car marketplace and is active in investing in transportation startups.
The additional $150 million will be coming from PA Grand Opportunity Limited.
Though the firm has not disclosed how it will exactly spend the money, it said that it will be used for "general corporate purposes."
Currently, the firm "makes revenues from advertising, subscriptions, transactions and marketing," the article said.
Bitauto is seen to be profitable by other companies as it generated 27 million sales leads and pulled out around 50,000 transactions.
While JD.com and Tencent have been previous investors, it was Baidu's first to take part in a new strategic partnership.
"We are delighted to announce today the strengthening of our strategic partnership with JD.com and Tencent, and the establishment of a new partnership with Baidu, the leader in Chinese language online search," Bitauto CEO William Li said in a statement.
"We are also pleased to welcome PAG, a leading regional private investment firm, as an important investor," Li added. "My personal participation in this transaction is a further testament to management's strong confidence in Bitauto's future development."
Under the agreement, Tencent, JD.com and Baidu will be purchasing 2,471,577 newly released ordinary Bitauto shares, with each share priced at $20.23.
On the other hand, the PAG investment will be coming in the form of convertible bonds. With a yearly interest rate of 2 percent, the bonds will be due in five years.
Bitauto is known for using strategic means of investments that ultimately help in expanding its presence.
"Through our cooperation over the past year with JD.com and Tencent, China's leaders in world-class e-commerce, social media and big data, we have gained tremendous momentum in making Bitauto the industry leader in online automobile transactions," the Bitauto CEO said.
Li also said that with its new partnership with Baidu, the firm is expecting to "leverage its leadership in mobile and desktop online search, big data and transaction services platforms for additional strategic advantages as [it] continues to create industry-leading new and used car purchasing experience for customers in China."
Apart from this recent fundraising, Bitauto is also reportedly in talks with U.S. transportation behemoth Uber to invest in Chinese carpooling firm Dida Pinche.
Uber is increasing its presence in China, which is currently dominated by Didi Chuxing (formerly known as Didi Kuaidi).
Meanwhile, Bitauto is an investor in Dida Pinche.
On top of this connection, Baidu is also a common investor in both Uber and Bitauto.
