Sequoia announced that it would invest in Auto1 worth $ 7.2 billion before its IPO

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Sequoia Capital has agreed to invest in Auto1 Group SE is valued at around 6 billion euros ($ 7.2 billion) ahead of the German online auto trading platform’s IPO, people with knowledge of the matter have said.

The American venture capital firm and the rival fund Lone Pine Capital has entered into a preliminary agreement to each purchase approximately € 50 million of Auto1stock from a leading investor DN Capital, according to people, who asked not to be identified because the information is private. They agreed to a six-month blocking period, the people said.

Sequoia and Lone Pine have also signaled plans to invest at least € 50 million each in the impending IPO of Auto1, the sources said.

This decision marks a vote of confidence in Auto1, backed by Japanese billionaire Masayoshi Son SoftBank Group Corp., and the online car buying and selling business. Auto1 said last week its goal of raising around € 1 billion from the share sale in Frankfurt in the first quarter.

A spokesperson for Auto1 declined to comment. A DN Capital official did not immediately respond to a request for comment, while representatives for Sequoia and Lone Pine could not be reached immediately during a U.S. holiday.

DN Capital became one of Auto1’s first backers when it invested in the company in 2013, the year following the creation of the German startup, according to its website. The venture capital firm previously invested in the app developer Shazam Entertainment Ltd., which created a music identification service later purchased by Apple Inc. He also helped fund a UK real estate agent online Purplebricks Group Plc and international money transfer service Remitly Inc.