Alibaba will become the biggest backer of the site and integrate parts of the business with its own e-commerce services. Warburg Pincus, Primavera Capital and CMB International also took part. The new funding round valued the company at between $1 billion and $2 billion, according to SouChe founder Yao Junhong.

SouChe sells used cars from dealers across the country, with interest in second-hand vehicles increasing as the Chinese economy begins to slow. The company also provides financing for customers to buy new vehicles for a year, which they can then purchase outright, trade in for a new model or hand back.The company may consider an initial public offering and could do so at a higher valuation than Qudian Inc., Yao said The online provider of credit products sold stock at a valuation of more than $6 billion last month.

“We are considering a U.S. IPO for next year, potentially towards the end of the year," Yao said. “But our finances are strong so we may not have to do it.”

The latest round follows an earlier funding that included Alibaba affiliate Ant Financial, which is working with SouChe to finance products and services through a product called TanGeChe. Over 50,000 cars have been sold through financing, with data from Alibaba and customers used to reduce the risk of bad debt - Yao said its default rate stood at less than 1 percent. These are then turned into asset-backed securities to raise money from the banks to purchase more cars.

The company is expecting to hit 150 billion yuan ($22.6 billion) in 2017 gross merchandise volume, which refers to the total value of cars sold on its platform.

SouChe has raised $615 million in the past year. But rivals in the sector include Renrenche.Com, which raised $200 million from car hailing service Didi Chuxing in September as well as Uxin Group, which has raised $500 million. Another rival Guazi.com raised $400 million this year, according to the South China Morning Post, and this week launched a similar car financing program.

Uxin in particular is a key threat with search giant Baidu Inc. and Tencent Holdings Ltd. among its shareholder base. However, Yao said his company’s advantage was its extensive connection to traditional offline used car dealerships.