Sequoia Capital has agreed to invest around 6 billion euros in Auto1 Group before the online car trading platform’s initial public offering (IPO), Bloomberg reported Monday (Sept. 18), citing anonymous sources.
Germany-based Auto1, backed by Japanese billionaire Masayoshi Son’s SoftBank, has seen popularity as of late, as rival U.S. fund Lone Pine Capital reached a preliminary deal to buy around 50 million euros of Auto1 stock from DN Capital, an early investor.
According to the sources, the lock-up period for that deal is six months, per Bloomberg.
In addition, Sequoia and Lone Pine both agreed to invest in the coming IPO.
Auto1 also said it’s aiming to raise 1 billion euros from a Frankfurt share sale in the first quarter.
DN Capital was one of the early backers of Auto1, investing in the company in 2013, just a year after the company founded, Bloomberg noted.
Auto1 announced its plan to go public last week. The company plans to put three-quarters of the money it raises back into its business, including the Autohero brand.
The IPO will be listed on the stock exchange in Frankfurt, Germany. In a press release, Auto1 touted its “proven business model” and the market existing in Europe for used cars. In addition, the company said the increasing amount of online sales was wind in their sales, too.
The IPO is the “next logical step to reinforce Auto1 Group as the go-to online destination for buying and selling used cars in Europe,” according to that press release.
“We intend to invest significantly over the next years to further strengthen our Autohero brand and operations to deliver the best experience to our customers,” the release said.
And Chief Financial Officer Markus Boser said the company had “demonstrated its path to profitability.”
Last July, Auto1 raised $300 million backed by Farallon Capital Management and the Baupost Group, along with SoftBank.