Why Goldman Sachs is getting back into Chinese autos

The Wall Street bank joins Tencent and Didi Chuxing in backing four-year-old car trading app Renrenche, marking its return to China’s automobile market after an eight-year hiatus.

Goldman Sachs announced its return to the Chinese automobile market after an absence of eight years on Thursday, leading a $300 million investment in Renrenche, an automobile portal for trading second-hand cars.

The bank is co-investing alongside Tencent and Didi Chuxing, both existing shareholders in the startup founded four years ago.

Tencent, the tech giant behind China’s biggest social messaging app WeChat, participated in Renrenche’s $85 million series C round of funding in August 2015. Car-hailing app Didi Chuxing invested $200 million in September last year.

Goldman Sachs's involvement in the deal was the most striking because it...

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