Exhibit 99.1



FINANCIAL STATEMENTS
OF SIGNIFICANT EQUITY METHOD INVESTEE

58 Daojia Inc.



INDEX TO CONSOLIDATED
FINANCIAL STATEMENTS



|                                                                                                                                                               |  |    
|-------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---
|Consolidated Financial Statements                                                                                                                              |  |    
|Report of Independent Auditors                                                                                                                                 |  | F-2
|Consolidated Balance Sheets as of December 31, 2015 and 2016                                                                                                   |  | F-3
|Consolidated Statements of Comprehensive Loss for the Period from November 27 to December 31, 2015 and the Year Ended December 31, 2016                        |  | F-4
|Consolidated Statements of Changes in Shareholders’ Equity/(Deficit) for the Period from November 27 to December 31, 2015 and the Year Ended December 31, 2016 |  | F-5
|Consolidated Statements of Cash Flows for the Period from November 27 to December 31, 2015 and the Year Ended December 31, 2016                                |  | F-6
|Notes to the Consolidated Financial Statements                                                                                                                 |  | F-7



F-1







Report of Independent Auditors



To the Board of Directors of 58 Daojia Inc.:



We have audited the accompanying consolidated
financial statements of 58 Daojia Inc. and its subsidiaries, which comprise the consolidated balance sheet as of December 31, 2016,
and the related consolidated statement of comprehensive loss, of shareholders’ equity/(deficit) and of cash flows for the year then
ended.





Management's Responsibility for the Consolidated Financial
Statements



Management is responsible for the preparation
and fair presentation of the consolidated financial statements in accordance with accounting principles generally accepted in the
United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation
and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.





Auditors’ Responsibility



Our responsibility is to express an opinion
on the consolidated financial statements based on our audit. We conducted our audit in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether the consolidated financial statements are free from material misstatement.



An audit involves performing procedures
to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend
on our judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether
due to fraud or error. In making those risk assessments, we consider internal control relevant to the Company's preparation and
fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances,
but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control. Accordingly, we express
no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant
accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.





Opinion



In our opinion, the consolidated financial
statements referred to above present fairly, in all material respects, the financial position of 58 Daojia Inc. and its subsidiaries
as of December 31, 2016 and the results of their operations and their cash flows for the year then ended in accordance with accounting
principles generally accepted in the United States of America.





/s/ PricewaterhouseCoopers Zhong Tian LLP

Beijing, the People’s Republic of China

June 28, 2017





F-2







58 Daojia Inc.

CONSOLIDATED BALANCE SHEETS

As of December 31, 2015 and 2016

(U.S. dollars in thousands, except share
data, unless otherwise noted)



|                                                                                                                                                                                                                                            |  | As of December 31,
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------
|                                                                                                                                                                                                                                            |  | 2015              
|                                                                                                                                                                                                                                            |  | (Unaudited)       
|ASSETS                                                                                                                                                                                                                                      |  |                   
|Current assets:                                                                                                                                                                                                                             |  |                   
|Cash                                                                                                                                                                                                                                        |  |                   
|Term deposits                                                                                                                                                                                                                               |  |                   
|Short-term investments                                                                                                                                                                                                                      |  |                   
|Accounts receivable (net of allowance for doubtful accounts of US$ nil as of December 31, 2015 and 2016, respectively)                                                                                                                      |  |                   
|Prepayments and other current assets                                                                                                                                                                                                        |  |                   
|Total current assets                                                                                                                                                                                                                        |  |                   
|Non-current assets:                                                                                                                                                                                                                         |  |                   
|Term deposits                                                                                                                                                                                                                               |  |                   
|Property and equipment, net                                                                                                                                                                                                                 |  |                   
|Intangible assets, net                                                                                                                                                                                                                      |  |                   
|Long-term investments                                                                                                                                                                                                                       |  |                   
|Long-term prepayments                                                                                                                                                                                                                       |  |                   
|Total non-current assets                                                                                                                                                                                                                    |  |                   
|Total assets                                                                                                                                                                                                                                |  |                   
|LIABILITIES, MEZZANINE EQUITY AND SHAREHOLDERS’ DEFICIT                                                                                                                                                                                     |  |                   
|Current liabilities:                                                                                                                                                                                                                        |  |                   
|Accounts payable (including accounts payable of the consolidated variable interest entity (“VIE”) without recourse to the Company of US$209 and US$150 as of December 31, 2015 and 2016, respectively)                                      |  |                   
|Customer advances (including customer advances of the consolidated VIE without recourse to the Company of US$107 and US$99 as of December 31, 2015 and 2016, respectively)                                                                  |  |                   
|Taxes payable (including taxes payable of the consolidated VIE without recourse to the Company of US$428 and US$738 as of December 31, 2015 and 2016, respectively)                                                                         |  |                   
|Salary and welfare payable (including salary and welfare payable of the consolidated VIE without recourse to the Company of US$1,944 and US$1,407 as of December 31, 2015 and 2016, respectively)                                           |  |                   
|Accrued expenses and other current liabilities (including accrued expenses and other current liabilities of the consolidated VIE without recourse to the Company of US$12,492 and US$20,459 as of December 31, 2015 and 2016, respectively) |  |                   
|Total current liabilities                                                                                                                                                                                                                   |  |                   
|Total liabilities                                                                                                                                                                                                                           |  |                   
|Commitments and contingencies (Note 17)                                                                                                                                                                                                     |  |                   
|Mezzanine equity                                                                                                                                                                                                                            |  |                   
|Shareholders’ deficit:                                                                                                                                                                                                                      |  |                   
|58 Daojia Inc. shareholders’ deficit                                                                                                                                                                                                        |  |                   
|Ordinary shares                                                                                                                                                                                                                             |  |                   
|Additional paid-in capital                                                                                                                                                                                                                  |  |                   
|Accumulated deficit                                                                                                                                                                                                                         |  |                   
|Accumulated other comprehensive income/(loss)                                                                                                                                                                                               |  |                   
|Total 58 Daojia Inc. shareholders’ deficit                                                                                                                                                                                                  |  |                   
|Total liabilities, mezzanine equity and shareholders’ deficit                                                                                                                                                                               |  |                   



The accompanying notes are an integral part
of these consolidated financial statements.



F-3







58 Daojia Inc.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE
LOSS

For the Period from November 27 to December
31, 2015 and the Year Ended December 31, 2016

(U.S. dollars in thousands, except share
data, unless otherwise noted)



|                                                        |  | For the Period from
                                                                                November 27 to
                                                                                December 31, 2015 |             | For the Year Ended
                                                                                December 31, 2016
|------------------------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------- | --------------------------------------------------------------------------------------------------------------------
|                                                        |  |                                                                                                                                                                                                                      | (Unaudited) |                                                                                                                     
|                                                        |  |                                                                                                                                                                                                                      |             |                                                                                                                     
|Revenues                                                |  |                                                                                                                                                                                                                      | 51          |                                                                                                                     
|Cost of revenues(1)                                     |  |                                                                                                                                                                                                                      | (137        | )                                                                                                                   
|Gross profit                                            |  |                                                                                                                                                                                                                      | (86         | )                                                                                                                   
|Operating expenses(1):                                  |  |                                                                                                                                                                                                                      |             |                                                                                                                     
|Sales and marketing expenses                            |  |                                                                                                                                                                                                                      | (8,341      | )                                                                                                                   
|Research and development expenses                       |  |                                                                                                                                                                                                                      | (1,108      | )                                                                                                                   
|General and administrative expenses                     |  |                                                                                                                                                                                                                      | (1,321      | )                                                                                                                   
|Total operating expenses                                |  |                                                                                                                                                                                                                      | (10,770     | )                                                                                                                   
|Loss from operations                                    |  |                                                                                                                                                                                                                      | (10,856     | )                                                                                                                   
|Other income/(expenses):                                |  |                                                                                                                                                                                                                      |             |                                                                                                                     
|Interest income                                         |  |                                                                                                                                                                                                                      | 249         |                                                                                                                     
|Investment income                                       |  |                                                                                                                                                                                                                      | 44          |                                                                                                                     
|Impairment of long-term investments                     |  |                                                                                                                                                                                                                      | —           |                                                                                                                     
|Foreign currency exchange loss, net                     |  |                                                                                                                                                                                                                      | —           |                                                                                                                     
|Others, net                                             |  |                                                                                                                                                                                                                      | 1           |                                                                                                                     
|Loss before tax                                         |  |                                                                                                                                                                                                                      | (10,562     | )                                                                                                                   
|Income tax expenses                                     |  |                                                                                                                                                                                                                      | —           |                                                                                                                     
|Net loss                                                |  |                                                                                                                                                                                                                      | (10,562     | )                                                                                                                   
|Other comprehensive loss:                               |  |                                                                                                                                                                                                                      |             |                                                                                                                     
|Foreign currency translation adjustment, net of nil tax |  |                                                                                                                                                                                                                      | (716        | )                                                                                                                   
|Total comprehensive loss                                |  |                                                                                                                                                                                                                      | (11,278     | )                                                                                                                   

Note



|Note: |                                                                                   
|----- | ----------------------------------------------------------------------------------
|(1)   | Share-based compensation expenses were allocated in operating expenses as follows:



|                                    |  | For the Period from
                                                                                November 27 to
                                                                                December 31, 2015 |             | For the Year Ended
                                                                                December 31, 2016
|----------------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------- | --------------------------------------------------------------------------------------------------------------------
|                                    |  |                                                                                                                                                                                                                      | (Unaudited) |                                                                                                                     
|                                    |  |                                                                                                                                                                                                                      |             |                                                                                                                     
|Sales and marketing expenses        |  |                                                                                                                                                                                                                      | 2           |                                                                                                                     
|Research and development expenses   |  |                                                                                                                                                                                                                      | 14          |                                                                                                                     
|General and administrative expenses |  |                                                                                                                                                                                                                      | 9           |                                                                                                                     



The accompanying notes are an integral part
of these consolidated financial statements.





F-4







58 Daojia Inc.

CONSOLIDATED STATEMENTS OF CHANGES IN
SHAREHOLDERS’ EQUITY/ (DEFICIT)

For the Period from November 27 to December
31, 2015 and the Year Ended December 31, 2016

(U.S. dollars in thousands, except share
data, unless otherwise noted)



|                                                        |  | Ordinary shares |             |   | Additional paid-in |  |   | Accumulated |  |  | Accumulated other comprehensive |   |  | Total shareholders’ |         
|------------------------------------------------------- |  | --------------- | ----------- | - | ------------------ |  | - | ----------- |  |  | ------------------------------- | - |  | ------------------- | --------
|                                                        |  | Shares*         |             |   | Amount             |  |   | capital     |  |  | deficit                         |   |  | Income/(loss)       |         
|                                                        |  |                 |             |   |                    |  |   |             |  |  |                                 |   |  |                     |         
|Balance as of November 27, 2015(unaudited)              |  |                 | 363,920,000 |   |                    |  | 1 |             |  |  | 118,731                         |   |  |                     | (117,856
|Share-based compensation                                |  |                 | —           |   |                    |  | — |             |  |  | 25                              |   |  |                     | —       
|Net loss                                                |  |                 | —           |   |                    |  | — |             |  |  | —                               |   |  |                     | (10,562 
|Foreign currency translation adjustment, net of nil tax |  |                 | —           |   |                    |  | — |             |  |  | —                               |   |  |                     | —       
|Balance as of December 31, 2015(unaudited)              |  |                 | 363,920,000 |   |                    |  | 1 |             |  |  | 118,756                         |   |  |                     | (128,418
|Share-based compensation**                              |  |                 | —           |   |                    |  | — |             |  |  | 13,407                          |   |  |                     | —       
|Net loss                                                |  |                 | —           |   |                    |  | — |             |  |  | —                               |   |  |                     | (152,367
|Foreign currency translation adjustment, net of nil tax |  |                 | —           |   |                    |  | — |             |  |  | —                               |   |  |                     | —       
|Repurchase of ordinary shares                           |  |                 | (12,400,000 | ) |                    |  | — |             |  |  | (1,508                          | ) |  |                     | —       
|Restricted shares vested**                              |  |                 | 12,400,000  |   |                    |  | — |             |  |  | —                               |   |  |                     | —       
|Balance as of December 31, 2016                         |  |                 | 363,920,000 |   |                    |  | 1 |             |  |  | 130,655                         |   |  |                     | (280,785





* Ordinary shares include Class A ordinary shares, Class B ordinary
shares and Class C ordinary shares. The number of ordinary shares is presented on stock split basis, please refer to Note 15.



** Out of US$13,407, US$12,276 was recognized for restricted
shares vested, please refer to Note 16.



The accompanying notes are an integral part
of these consolidated financial statements.





F-5







58 Daojia Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Period from November 27 to December
31, 2015 and the year ended December 31, 2016

(U.S. dollars in thousands, except share
data, unless otherwise noted)



|                                                                             |  | For the Period from
                                                                                November 27 to
                                                                                December 31, 2015 |             | For the Year
                                                                                                         Ended December
                                                                                                         31, 2016
|---------------------------------------------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                             |  |                                                                                                                                                                                                                      | (Unaudited) |                                                                                                                                                                                                                                                       
|                                                                             |  |                                                                                                                                                                                                                      |             |                                                                                                                                                                                                                                                       
|Cash flows from operating activities:                                        |  |                                                                                                                                                                                                                      |             |                                                                                                                                                                                                                                                       
|Net loss                                                                     |  |                                                                                                                                                                                                                      | (10,562     | )                                                                                                                                                                                                                                                     
|Adjustments to reconcile net loss to net cash used in  operating activities: |  |                                                                                                                                                                                                                      |             |                                                                                                                                                                                                                                                       
|Share-based compensation expenses                                            |  |                                                                                                                                                                                                                      | 25          |                                                                                                                                                                                                                                                       
|Depreciation and amortization expenses                                       |  |                                                                                                                                                                                                                      | 56          |                                                                                                                                                                                                                                                       
|Investment income                                                            |  |                                                                                                                                                                                                                      | (44         | )                                                                                                                                                                                                                                                     
|Impairment of long-term investments                                          |  |                                                                                                                                                                                                                      | —           |                                                                                                                                                                                                                                                       
|Loss on disposal of property and equipment                                   |  |                                                                                                                                                                                                                      | 7           |                                                                                                                                                                                                                                                       
|Foreign currency exchange loss, net                                          |  |                                                                                                                                                                                                                      | —           |                                                                                                                                                                                                                                                       
|Changes in operating assets and liabilities:                                 |  |                                                                                                                                                                                                                      |             |                                                                                                                                                                                                                                                       
|Accounts receivable                                                          |  |                                                                                                                                                                                                                      | (338        | )                                                                                                                                                                                                                                                     
|Prepayments and other assets                                                 |  |                                                                                                                                                                                                                      | (316        | )                                                                                                                                                                                                                                                     
|Accounts payable                                                             |  |                                                                                                                                                                                                                      | (174        | )                                                                                                                                                                                                                                                     
|Customer advances                                                            |  |                                                                                                                                                                                                                      | 112         |                                                                                                                                                                                                                                                       
|Salary and welfare payable                                                   |  |                                                                                                                                                                                                                      | (385        | )                                                                                                                                                                                                                                                     
|Taxes payable                                                                |  |                                                                                                                                                                                                                      | 13          |                                                                                                                                                                                                                                                       
|Accrued expenses and other current liabilities                               |  |                                                                                                                                                                                                                      | 2,401       |                                                                                                                                                                                                                                                       
|Net cash used in operating activities                                        |  |                                                                                                                                                                                                                      | (9,205      | )                                                                                                                                                                                                                                                     
|Cash flows from investing activities:                                        |  |                                                                                                                                                                                                                      |             |                                                                                                                                                                                                                                                       
|Purchase of property and equipment                                           |  |                                                                                                                                                                                                                      | (653        | )                                                                                                                                                                                                                                                     
|Purchase of intangible assets                                                |  |                                                                                                                                                                                                                      | —           |                                                                                                                                                                                                                                                       
|Cash received for disposal of property and equipment                         |  |                                                                                                                                                                                                                      | —           |                                                                                                                                                                                                                                                       
|Increase of receivable from an equity investee                               |  |                                                                                                                                                                                                                      | —           |                                                                                                                                                                                                                                                       
|Purchase of long-term investments                                            |  |                                                                                                                                                                                                                      | —           |                                                                                                                                                                                                                                                       
|Purchase of term deposits                                                    |  |                                                                                                                                                                                                                      | (216,667    | )                                                                                                                                                                                                                                                     
|Proceeds from maturity of term deposits                                      |  |                                                                                                                                                                                                                      | —           |                                                                                                                                                                                                                                                       
|Purchase of short-term investments                                           |  |                                                                                                                                                                                                                      | (32,614     | )                                                                                                                                                                                                                                                     
|Proceeds from maturity of short-term investments                             |  |                                                                                                                                                                                                                      | —           |                                                                                                                                                                                                                                                       
|Net cash (used in)/provided by investing activities                          |  |                                                                                                                                                                                                                      | (249,934    | )                                                                                                                                                                                                                                                     
|Cash flows from financing activities:                                        |  |                                                                                                                                                                                                                      |             |                                                                                                                                                                                                                                                       
|Repurchase of ordinary shares                                                |  |                                                                                                                                                                                                                      | —           |                                                                                                                                                                                                                                                       
|Net cash used in financing activities                                        |  |                                                                                                                                                                                                                      | —           |                                                                                                                                                                                                                                                       
|Effect of exchange rate changes on cash                                      |  |                                                                                                                                                                                                                      | (470        | )                                                                                                                                                                                                                                                     
|Net decrease in cash                                                         |  |                                                                                                                                                                                                                      | (259,609    | )                                                                                                                                                                                                                                                     
|Cash at the beginning of the period/year                                     |  |                                                                                                                                                                                                                      | 304,471     |                                                                                                                                                                                                                                                       
|Cash at the end of the year                                                  |  |                                                                                                                                                                                                                      | 44,862      |                                                                                                                                                                                                                                                       
|Supplemental disclosure of non-cash activities:                              |  |                                                                                                                                                                                                                      |             |                                                                                                                                                                                                                                                       
|Property and equipment in accounts payable                                   |  |                                                                                                                                                                                                                      | 37          |                                                                                                                                                                                                                                                       



The accompanying notes
are an integral part of these consolidated financial statements.



F-6







58 Daojia Inc.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(U.S.
dollars in thousands, except share data, unless otherwise noted)





1. Organization and principal activities



a. Background



58 Daojia Inc. (the
"Company" or "58 Home"), through its consolidated subsidiaries, including wholly-foreign owned enterprise (“WFOE”),
variable interest entity ("VIE") and VIE’s subsidiary (collectively, the "Group"), operates a mobile-based
closed-loop transactional platform for home services, which directly connects consumers and individual service providers for local
services such as domestic services, ad-hoc delivery services and platform services provided at home.



b. History of the Group and basis of
presentation



The Company was incorporated
in British Virgin Islands on January 26, 2015.



The Group began its
operations in China in August 2014 through Tianjin 58 Home, a PRC limited liability company founded by Mr. Xiaohua Chen, the CEO
of the Group, Mr. Jinbo Yao, the CEO of 58.com Inc. and 58.Co. Ltd.



In July 2015, the
Company, through Beijing 58 Home, entered into a series of contractual agreements with Tianjin 58 Home whereby Tianjin 58 Home
became the 100% consolidated VIE of the Company (“the reorganization”) (See Note d.).



On November 27, 2015,
the Company completed a Series A round of equity financing, with participation from Alibaba Group Holding Limited, global investment
firm KKR, and Ping An Group. Following the closing of the Series A round of equity financing of the Company, 58.com Inc. holds
87.9% of the total outstanding ordinary shares of the Company and 61.7% of the total outstanding shares of the Company on an as-converted
basis.



58.com Inc. accounted
for its investment in 58 Home using equity method. As 58 Home is considered to be a significant equity method investee, its financial
statements are included as an exhibit to the Annual Report of 58.com Inc. on Form 20-F in accordance with Securities and Exchange
Commission (“SEC”) Rule 3-09 of Regulation S-X.



c. Major subsidiaries and VIEs



In 2016, the Company's
subsidiaries, VIE and VIE’s subsidiary are as follows:



|Name                                                                   |  | Date of
        incorporation and
        acquisition |  | Place of
        incorporation |  | Percentage of
        direct or indirect
        economic ownership
|---------------------------------------------------------------------- |  | ----------------------------------------------------- |  | ------------------------------ |  | -------------------------------------------------------------------
|Wholly owned subsidiaries of the Company:                              |  |                                                       |  |                                |  |                                                                    
|Beijing 58 Daojia Information Technology Co., Ltd. (“Beijing 58 Home”) |  | July 10, 2015                                         |  | PRC                            |  |                                                                    
|58 Daojia Holding Limited. (“Daojia Holding”)                          |  | February 12, 2015                                     |  | Hong Kong                      |  |                                                                    
|                                                                       |  |                                                       |  |                                |  |                                                                    
|VIE and VIE’s subsidiary:                                              |  |                                                       |  |                                |  |                                                                    
|Tianjin 58 Daojia Life Services Co., Ltd. (“Tianjin 58 Home”)          |  | August 19, 2014                                       |  | PRC                            |  |                                                                    
|58 Daojia Co., Ltd. (“Changsha 58 Home”)                               |  | August 13, 2015                                       |  | PRC                            |  |                                                                    







F-7







58 Daojia Inc.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(U.S.
dollars in thousands, except share data, unless otherwise noted)



d. Contractual arrangements
with the Group’s VIE



The Company has through
Beijing 58 Home entered into contractual arrangements with Tianjin 58 Home and its shareholders described below, which are referred
to as the Tianjin 58 Home Agreements. Through the Tianjin 58 Home Agreements, Beijing 58 Home exercises control over the operations
of Tianjin 58 Home and receives substantially all its economic benefits and residual returns. Through the exclusive business cooperation
agreement between Beijing 58 Home and Tianjin 58 Home, Beijing 58 Home agrees to provide certain technical and business support
and related consulting services to Tianjin 58 Home in exchange for service fees. In addition, pursuant to the exclusive option
agreements, Tianjin 58 Home is prohibited from declaring and paying any dividends without Beijing 58 Home’s prior consent
and Beijing 58 Home enjoys an irrevocable and exclusive option to purchase Tianjin 58 Home shareholders’ equity interests,
to the extent permitted by applicable PRC laws, at a specified price equal to the loan amount provided by Beijing 58 Home to the
shareholders. If the lowest price permitted under PRC law is higher than the above price, the lowest price permitted under PRC
law shall apply. Through these arrangements, 58 Home can obtain all of the income and the residual interests of Tianjin 58 Home,
such as undistributed earnings, either through dividend distributions or purchase of equity interests of Tianjin 58 Home from its
existing shareholders. As a result of the contractual arrangements, 58 Home consolidates the financial results of Tianjin 58 Home
in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”). In July 2016, one shareholder
of Tianjin 58 Home transferred his equity interest in Tianjin 58 Home to 58 Co., Ltd. As a result, Beijing 58 Home amended and
restated its contractual arrangements with Tianjin 58 Home to reflect the change in shareholding of Tianjin 58 Home.



Exclusive Business
Cooperation Agreement



Under the exclusive
business cooperation agreement between Tianjin 58 Home and Beijing 58 Home, as amended and restated, Beijing 58 Home has the exclusive
right to provide, among other things, technical support and business support and related consulting services to Tianjin 58 Home
and Tianjin 58 Home agrees to accept all the consultation and services provided by Beijing 58 Home. Without Beijing 58 Home’s
prior written consent, Tianjin 58 Home is prohibited from engaging any third party to provide any of the services under this agreement.
In addition, Beijing 58 Home exclusively owns all intellectual property rights arising out of or created during the performance
of this agreement. Tianjin 58 Home agrees to pay a monthly service fee to Beijing 58 Home at an amount determined solely by Beijing
58 Home after taking into account factors including the complexity and difficulty of the services provided, the time consumed,
the seniority of the Beijing 58 Home employees providing services to Tianjin 58 Home, the value of services provided, the market
price of comparable services and the operating conditions of Tianjin 58 Home. This agreement will remain effective unless Beijing
58 Home terminates the agreement in writing or a competent governmental authority rejects the renewal applications by either Tianjin
58 Home or Beijing 58 Home to renew its respective business license upon expiration. Tianjin 58 Home is not permitted to terminate
this agreement in any event unless required by applicable laws. Beijing 58 Home did not collect any service fee payments from Tianjin
58 Home in 2016.



Powers of Attorney



Pursuant to the powers
of attorney, the shareholders of Tianjin 58 Home each irrevocably appointed Beijing 58 Home as the attorney-in-fact to act on their
behalf on all matters pertaining to Tianjin 58 Home and to exercise all of their rights as a shareholder of Tianjin 58 Home, including
but not limited to attend shareholders’ meetings, vote on their behalf on all matters of Tianjin 58 Home requiring shareholders’
approval under PRC laws and regulations and the articles of association of Tianjin 58 Home, designate and appoint directors and
senior management members. Beijing 58 Home may authorize or assign its rights under this appointment to any other person or entity
at its sole discretion without prior notice to the shareholders of Tianjin 58 Home. Each power of attorney will remain in force
until the shareholder ceases to hold any equity interest in Tianjin 58 Home.



Equity Interest
Pledge Agreements



Under the equity interest
pledge agreements between Beijing 58 Home, Tianjin 58 Home and the shareholders of Tianjin 58 Home, as amended and restated, the
shareholders pledged all of their equity interests in Tianjin 58 Home to Beijing 58 Home to guarantee Tianjin 58 Home’s and
Tianjin 58 Home’s shareholders’ performance of their obligations under the contractual arrangements including, but
not limited to, the payments due to Beijing 58 Home for services provided. If Tianjin 58 Home or any of Tianjin 58 Home’s
shareholders breaches its contractual obligations under the contractual arrangements, Beijing 58 Home, as the pledgee, will be
entitled to certain rights and entitlements, including receiving proceeds from the auction or sale of whole or part of the pledged
equity interests of Tianjin 58 Home in accordance with legal procedures. Beijing 58 Home has the right to receive dividends generated
by the pledged equity interests during the term of the pledge. If any event of default as provided in the contractual arrangements
occurs, Beijing 58 Home, as the pledgee, will be entitled to dispose of the pledged equity interests in accordance with PRC laws
and regulations. The pledge will become effective on the date when the pledge of equity interests contemplated in these agreements
are registered with the relevant local administration for industry and commerce and will remain binding until Tianjin 58 Home and
its shareholders discharges all their obligations under the contractual arrangements. These equity interest pledge agreements are
registered with the Tianjin Binhai New Area Market and Quality Supervision and Administration Bureau on September 8, 2015.





F-8







58 Daojia Inc.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(U.S.
dollars in thousands, except share data, unless otherwise noted)





Exclusive Option
Agreements



Under the exclusive
option agreements among Beijing 58 Home, as amended and restated, Tianjin 58 Home and each of the shareholders of Tianjin 58 Home,
each of the shareholders irrevocably granted Beijing 58 Home or its designated representative(s) an exclusive option to purchase,
to the extent permitted under PRC law, all or part of his, her or its equity interests in Tianjin 58 Home. In addition, Beijing
58 Home has the option to acquire all the equity interests held by the shareholders in Tianjin 58 Home at a specified price equal
to the loan amount provided by Beijing 58 Home to the individual shareholders. At the moment, 58 Home cannot exercise the exclusive
options to purchase the current shareholders’ equity interests in Tianjin 58 Home due to the PRC regulatory restrictions
on foreign ownership in the value-added telecommunications services. 58 Home may exercise the options if China opens up these industries
to foreign investment.



Loan Agreements



Pursuant to the loan
agreements between Beijing 58 Home and each individual shareholder of Tianjin 58 Home, Beijing 58 Home provided interest-free loans
with an aggregate amount of approximately RMB100 million to the individual shareholders of Beijing 58 Home for the sole purpose
of funding the capital increase of Tianjin 58 Home. The loans can be repaid by transferring the individual shareholders’
equity interest in Tianjin 58 Home to Beijing 58 Home or its designated person pursuant to Exclusive Option Agreements. The term
of each loan agreement is ten years from the date of the agreement expiring on August 25, 2025 and can be extended with the written
consent of both parties before expiration.



Risks in Relation
to the VIE Structure



As of December 31,
2016, the aggregate accumulated losses of VIE and VIE’s subsidiary were approximately US$145,812, which has been included
in the consolidated financial statements.



The following financial
statement amounts and balances of the Group's VIE and VIE’s subsidiary were included in the accompanying consolidated financial
statements as of December 31, 2015 and 2016 and for the period from November 27 to December 31, 2015 and for the year ended December
31, 2016. All intercompany transactions have been eliminated in consolidated financial statements.



|                                                   |  | As of December 31,
|-------------------------------------------------- |  | ------------------
|                                                   |  | 2015              
|                                                   |  | (Unaudited)       
|Cash                                               |  |                   
|Short-term investments                             |  |                   
|Accounts receivable, net                           |  |                   
|Prepayments and other current assets               |  |                   
|Property and equipment, net                        |  |                   
|Long-term investments                              |  |                   
|Intangible assets, net                             |  |                   
|Long-term prepayments and other non-current assets |  |                   
|Total assets                                       |  |                   
|Accounts payable                                   |  |                   
|Customer advances                                  |  |                   
|Taxes payable                                      |  |                   
|Salary and welfare payable                         |  |                   
|Inter-company payable                              |  |                   
|Accrued expenses and other current liabilities     |  |                   
|Total liabilities                                  |  |                   



F-9









58 Daojia Inc.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(U.S.
dollars in thousands, except share data, unless otherwise noted)



|                                                    |  | For the period from
                                                                                November 27 to
                                                                                December 31, 2015 |             | For the year ended
                                                                                                                                                                                              December 31, 2016
|--------------------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                    |  |                                                                                                                                                                                                                      | (Unaudited) |                                                                                                                                                                                                                                   
|                                                    |  |                                                                                                                                                                                                                      |             |                                                                                                                                                                                                                                   
|Revenue                                             |  |                                                                                                                                                                                                                      | 51          |                                                                                                                                                                                                                                   
|Net loss                                            |  |                                                                                                                                                                                                                      | (4,985      | )                                                                                                                                                                                                                                 
|Net cash (used in)/provided by operating activities |  |                                                                                                                                                                                                                      | (14,380     | )                                                                                                                                                                                                                                 
|Net cash used in investing activities               |  |                                                                                                                                                                                                                      | (15         | )                                                                                                                                                                                                                                 
|Net cash provided by financing activities           |  |                                                                                                                                                                                                                      | —           |                                                                                                                                                                                                                                   



Under the
contractual arrangements with the VIE and through its respective equity interest in its subsidiary, the Group has the power to
direct activities of the VIE and the VIE’s subsidiary and direct the transfer of assets out of the VIE and the VIE’s
subsidiary. Therefore the Group considers that there is no asset of the VIE and the VIE’s subsidiary that can be used only
to settle their obligations. As the consolidated VIE and VIE’s subsidiary are incorporated as limited liability companies
under the PRC Company Law, the creditors do not have recourse to the general credit of the Company for the liabilities of the consolidated
VIE and the VIE’s subsidiary.



The Group believes
that the contractual arrangements among VIE, its respective shareholders and relevant WFOE are in compliance with PRC law and are
legally enforceable. However, uncertainties in the PRC legal system could limit the Company’s ability to enforce these contractual
arrangements and if the shareholders of VIE were to reduce their interest in the Company, their interests may diverge from that
of the Company and that may potentially increase the risk that they would seek to act contrary to the contractual terms.



Through the design
of the power of attorney agreements, the shareholders of the VIE effectively assigned their full voting rights to WFOE, which gives
WFOE the power to direct the activities of VIE and VIE’s subsidiary. As noted above, the Company believes this power of attorney
is legally enforceable but may not be as effective as direct equity ownership.



It is possible that
the Group’s operation of certain of its businesses through the VIE could be found by PRC authorities to be in violation of
PRC law and regulations prohibiting or restricting foreign ownership of companies that engage in such operations and businesses.
While the Group’s management considers the possibility of such a finding by PRC regulatory authorities under current PRC
law and regulations to be remote, on January 19, 2015, the Ministry of Commerce of the PRC, or (the “MOFCOM”) released
on its Website for public comment a proposed PRC law (the “Draft FIE Law”) that appears to include VIEs within the
scope of entities that could be considered to be foreign invested enterprises (or “FIEs”) that would be subject to
restrictions under existing PRC law and regulations on foreign investment in certain categories of industry. Specifically, the
Draft FIE Law introduces the concept of “actual control” for determining whether an entity is considered to be an FIE.
In addition to control through direct or indirect ownership or equity, the Draft FIE Law includes control through contractual arrangements
within the definition of “actual control.” If the Draft FIE Law is passed by the People’s Congress of the PRC
and goes into effect in its current form, these provisions regarding control through contractual arrangements could be construed
to apply to the Group’s VIE arrangements, and as a result the Group’s VIE could become explicitly subject to the current
restrictions on foreign investment in certain categories of industries. The Draft FIE Law includes provisions that would exempt
from the definition of foreign invested enterprises entities where the ultimate controlling shareholders are either entities organized
under PRC law or individuals who are PRC citizens. The Draft FIE Law is silent as to what type of enforcement action might be taken
against existing VIE that operate in restricted or prohibited industries and are not controlled by entities organized under PRC
law or individuals who are PRC citizens. If a finding were made by PRC authorities, under existing law and regulations or under
the Draft FIE Law if it becomes effective, that the Group’s operation of certain of its operations and businesses through
the VIE is prohibited, the regulatory authorities with jurisdiction over the licensing and operation of such operations and businesses
would have broad discretion in dealing with such a violation, including levying fines, confiscating the Group’s income, revoking
the business or operating licenses of the affected businesses, requiring the Group to restructure its ownership structure or operations,
or requiring the Group to discontinue any or all portion of its operations. Any of these actions could cause significant disruption
to the Group’s business operations, and have a severe adverse impact on the Group’s cash flows, financial position
and operating performance.



In addition, if the
legal structure and contractual arrangements were found to be in violation of any other existing PRC laws and regulations, the
PRC government could:



F-10







58 Daojia Inc.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(U.S.
dollars in thousands, except share data, unless otherwise noted)





| | • | revoke the Group’s business and operating licenses;
| | - | ---------------------------------------------------



| | • | require the Group to discontinue or restrict operations;
| | - | --------------------------------------------------------



| | • | restrict the Group’s right to collect revenues;
| | - | -----------------------------------------------



| | • | block the Group’s websites;
| | - | ---------------------------



| | • | require the Group to restructure the operations in
such a way as to compel the Group to establish a new enterprise, re-apply for the necessary licenses or relocate its businesses,
staff and assets;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | 
| |  | 

| | • | impose additional conditions or requirements with which
the Group may not be able to comply; or
| | - | -----------------------------------------------------------------------------------------------



| | • | take other regulatory or enforcement actions against
the Group that could be harmful to the Group’s business.
| | - | -------------------------------------------------------------------------------------------------------------



The imposition of
any of these penalties may result in a material and adverse effect on the Group’s ability to conduct the Group’s business.
In addition, if the imposition of any of these penalties causes the Group to lose the right to direct the activities of any of
the VIE (through its equity interest in its subsidiaries) or the right to receive their economic benefits, the Group would no longer
be able to consolidate the relevant VIE and its subsidiary, if any. In the opinion of management, the likelihood of loss in respect
of the Group's current ownership structure or the contractual arrangements with its VIE is remote.



There is no VIE for
which the Company has variable interest but is not the primary beneficiary.



Currently there is
no contractual arrangement that could require the Company to provide additional financial support to the VIE. As the Company is
conducting its business mainly through the VIE, the Company may provide such support on a discretionary basis in the future, which
could expose the Company to a loss.



The Company’s
VIE’s assets are comprised of recognized and unrecognized revenue-producing assets. The recognized revenue producing assets
mainly include purchased servers, which were in the line of “Property and equipment, net” in the table above. The unrecognized
revenue-producing assets mainly consist of the Internet Content Provider license (“ICP” license), trademarks, copyrights
and registered patents, which have no recorded value.



The VIE’s
business operations rely in part on the technologies covered by the registered patents to generate revenues. Such technologies
include (1) the data verification and processing technology used to verify and process local merchant information; (2) the data
researching technology provided to end-users enable them to find the exact information they want in the shortest time; (3) the
data publishing technology provided to merchants to help them to publish their service information more efficiently.



e. Liquidity



The Group's consolidated
financial statements have been prepared on a going concern basis, which contemplates the realization of assets and liquidation
of liabilities during the normal course of operations. The Group incurred net loss of approximately US$10,562 and US$152,367 during
the period from November 27 to December 31, 2015 and the year ended December 31, 2016, respectively, and the net cash used in operating
activities was US$9,205 and US$104,089 during the period from November 27 to December 31, 2015 and the year ended December 31,
2016, respectively. Accumulated deficit was US$128,418 and US$280,785 as of December 31, 2015 and 2016, respectively. As of December
31, 2016, the Group’s total current assets exceeded the current liabilities by US$131,278. The Group believes that the available
cash, term deposits, short-term investments and cash generated from operations will be sufficient to meet the working capital requirements
and capital expenditures in the ordinary course of business for the next twelve months. The Group regularly monitors current and
expected liquidity requirements to ensure that it maintains sufficient cash balances to meet its liquidity requirements in the
short and long term. The Group has adopted Accounting Standards Update (“ASU”) No.2014-15 “Presentation of Financial
Statements – Going Concern” which addresses management’s responsibility to evaluate whether there is a substantial
doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures if the substantial
doubt exists. Based on the Group’s operating plan without considering any mitigating plan as discussed in ASU No. 2014-15,
or any guarantee by related party, the management is of the opinion that, the Group’s current cash and anticipated cash flow
from operations provide sufficient funds to meet the working capital requirements to fund planned operations and other commitments
for at least the next twelve months from the date the consolidated financial statements for the year ended December 31, 2016 are
issued. As a result, the consolidated financial statements of the Group for the year ended December 31, 2016 have been prepared
on a going concern basis.





F-11









58 Daojia Inc.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(U.S.
dollars in thousands, except share data, unless otherwise noted)







2. Principal accounting policies





| | (a) | Principles of consolidation
| | --- | ---------------------------



The consolidated financial
statements of the Group have been prepared in accordance with U.S. GAAP. The consolidated financial statements include the
financial statements of the Company, its subsidiaries, the VIE and VIE’s subsidiary for which the Company is the ultimate
primary beneficiary.



Subsidiaries are those
entities in which the Company, directly or indirectly, controls more than one half of the voting power; or has the power to govern
the financial and operating policies, to appoint or remove the majority of the members of the board of directors, or to cast a
majority of votes at the meeting of directors.



A VIE is an entity
in which the Company or its subsidiary, through contractual arrangements, bears the risks of, and enjoys the rewards normally associated
with, ownership of the entity, and therefore the Company or its subsidiary is the primary beneficiary of the entity.



All significant transactions
and balances among the Company, its subsidiaries, the VIE and VIE’s subsidiary have been eliminated upon consolidation.



| | (b) | Use of estimates
| | --- | ----------------



The preparation of
the Group’s consolidated financial statements in conformity with the U.S. GAAP requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities.
Actual results could differ materially from those estimates. Significant accounting estimates reflected in the Group’s consolidated
financial statements mainly include the determination of the fair value of mezzanine equity, the valuation allowance of deferred
tax assets, the determination of uncertain tax position, the valuation and recognition of share-based compensation, impairment
of long-term investments and other long-lived assets and the determination of the estimated useful lives of property and equipment
and intangible assets.



| | (c) | Functional currency and foreign currency translation
| | --- | ----------------------------------------------------



The Group uses United States
dollar (“US$”) as its reporting currency. The functional currency of the Company and its subsidiary incorporated in
Hong Kong is US$, while the functional currency of the other entities in the Group is Renminbi (“RMB”). In the consolidated
financial statements, the financial information of the Company’s PRC subsidiaries, the VIE and VIE’s subsidiary, which
use RMB as their functional currency, have been translated into US$. Assets and liabilities are translated at the exchange rates
on the balance sheet date; equity amounts are translated at historical exchange rates; and revenues, expenses, gains, and losses
are translated using the average rate for the year. Translation adjustments arising from these are reported as foreign currency
translation adjustments and are shown as a component of other comprehensive income/(loss) in the consolidated statements of changes
in shareholders’ equity/(deficit).



Foreign currency transactions
denominated in currencies other than the functional currency are translated into the functional currency using the exchange rates
prevailing at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are translated into
the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are
included in the consolidated statements of comprehensive income/ (loss).



| | (d) | Fair value of financial instruments
| | --- | -----------------------------------



Accounting guidance
defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required
or permitted to be recorded at fair value, the Group considers the principal or most advantageous market in which it would transact
and it considers assumptions that market participants would use when pricing the asset or liability.



Accounting guidance
establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable
inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the
lowest level of input that is significant to the fair value measurement. Accounting guidance establishes three levels of inputs
that may be used to measure fair value:





F-12









58 Daojia Inc.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(U.S.
dollars in thousands, except share data, unless otherwise noted)





Level 1 - Observable
inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets



Level 2 - Include
other inputs that are directly or indirectly observable in the marketplace



Level 3 - Unobservable
inputs which are supported by little or no market activity



The Group’s
financial instruments mainly include term deposits, short-term investments, accounts receivable, accounts payable, customer advances,
and accrued liabilities and other current liabilities. The carrying value of the Company’s short-term financial instruments
approximates their fair value because of their short maturities. The Company measures certain financial assets, including the investments
under the cost method, intangible assets and fixed assets on other-than-temporary basis, which are marked to fair value when an
impairment charge is recognized. Please see Note 12 for additional information.



| | (e) | Cash and cash equivalents
| | --- | -------------------------



Cash and cash equivalents
represent cash on hand, demand deposits and highly liquid investments placed with banks or other financial institutions, which
are unrestricted as to withdrawal or use, and which have original maturities of three months or less and are readily convertible
to known amounts of cash.



The following table
sets forth a breakdown of the Group’s cash by currency denomination, jurisdiction and geographical location as of December
31, 2015 and 2016:



|                                                                                 |  | US$ in thousands |   | RMB in thousands |  | US$ in thousands
|-------------------------------------------------------------------------------- |  | ---------------- | - | ---------------- |  | ----------------
|                                                                                 |  | USA              |   | Hong Kong        |  | China Non VIE   
|December 31,
                                                    2015(Unaudited) |  |                  | — |                  |  |                 
|December 31,
                                        2016                        |  |                  | — |                  |  |                 





| | (f) | Term deposits
| | --- | -------------



Term deposits represent
time deposits placed with banks with original maturities of more than three months. Interest earned is recorded as interest income
in the consolidated statements of comprehensive income/ (loss) during the periods presented.



| | (g) | Short-term investments
| | --- | ----------------------



Short-term
investments include wealth management products with variable interest rates which were purchased from commercial banks. The
Group carries these investments at fair value. Changes in the fair value are reflected in the consolidated statements of
comprehensive income/ (loss) as investment income. Fair value is estimated based on quoted prices of similar products provided
by banks at the end of each period. The Group classifies the valuation techniques that use these inputs as Level 2 of fair
value measurements. Please see Note 12 for additional information.



| | (h) | Accounts receivable, net
| | --- | ------------------------



The carrying value
of accounts receivable is reduced by an allowance that reflects the Group’s best estimate of the amounts that will not be
collected. The Group makes estimations for the collectability of accounts receivable considering many factors including but not
limited to reviewing accounts receivable balances, historical bad debt rates, accounts aging, repayment patterns, customer credit
worthiness, financial conditions of the customers and industry trend analysis, resulting in their inability to make payments due
to the Group. An accounts receivable is written off after all collection effort has ceased. The Group recognized US$ nil allowance
for doubtful accounts for the period from November 27 to December 31, 2015 and the year ended December 31, 2016.



| | (i) | Property and equipment, net
| | --- | ---------------------------



Property and equipment
are stated at cost less accumulated depreciation and impairment. Property and equipment are depreciated over the estimated useful
lives on a straight-line basis. The estimated useful lives are as follows:



F-13







58 Daojia Inc.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(U.S.
dollars in thousands, except share data, unless otherwise noted)





|Computers and equipment | 3 years                                                                                
|----------------------- | ---------------------------------------------------------------------------------------
|Furniture and fixtures  | 5 years                                                                                
|Leasehold improvements  | Over the shorter of lease terms
        or
        the estimated useful lives of assets
|Software                | 1-3 years                                                                              



Expenditures
for maintenance and repairs are expensed as incurred. The gain or loss on the disposal of property and equipment is the difference
between the net sales proceeds and the carrying amount of the relevant assets and is recognized under others, net in the consolidated
statements of comprehensive income/ (loss).



| | (j) | Intangible assets, net
| | --- | ----------------------



Intangible assets
purchased are recognized and measured at fair value upon acquisition. Intangible assets with finite lives are carried at cost less
accumulated amortization. Separately identifiable intangible assets that have determinable lives continue to be amortized over
their estimated useful lives using the straight-line method as follows:



|Domain names | 3 - 10 years
|------------ | ------------



Intangible
assets with infinite lives are evaluated to determine the fair value annually. An impairment loss is recognized if the carrying
amount exceeds the fair value. Determination of recoverability is based on an estimate of undiscounted future cash flows resulting
from the use of the asset and its eventual disposition. Measurement of any impairment loss for identifiable intangible assets is
based on the amount by which the carrying amount of the assets exceeds the fair value of the asset.



| | (k) | Long-term investments
| | --- | ---------------------



Long-term investments
represent the Group’s investments in privately held companies.



In accordance with
ASC 323 “Investment-Equity Method and Joint Ventures”, the Group applies the equity method of accounting to equity
investments, in common stock or in-substance common stock, over which it has significant influence but does not own a majority
equity interest or otherwise control.



An investment in in-substance
common stock is an investment that has risk and reward characteristics that are substantially similar to that entity’s common
stock. The Group considers subordination, risks and rewards of ownership and obligation to transfer value when determining whether
an investment in an entity is substantially similar to an investment in that entity’s common stock.



As the Group's investments
were not considered as in-substance common stock and have no readily determinable fair value, the cost method of accounting is
used.



The Company
assesses its long-term investments accounted for under the cost method for other-than-temporary impairment by considering factors
including, but not limited to, current economic and market conditions, operating performance of the companies, including current
earnings trends and undiscounted cash flows, and other company-specific information, such as recent financing rounds. The fair
value determination, particularly for investments in privately-held companies whose revenue model is still evolving, requires significant
judgment to determine appropriate estimates and assumptions. Changes in these estimates and assumptions could affect the calculation
of the fair value of the investments and the determination of whether any identified impairment is other-than-temporary. If any
impairment is considered other-than-temporary, the Company will write down the asset to its fair value and take the corresponding
change to the consolidated comprehensive income/ (loss).



Impairment charges
in connection with the cost method investments of US$ nil and US$9,981 were recorded in the consolidated statements of comprehensive
loss for the period from November 27 to December 31, 2015 and the year ended December 31, 2016, respectively.



| | (l) | Customer advances
| | --- | -----------------



Customers
pay in advance for domestic services. The cash proceeds received from customers are initially recorded as customer advances and
then transferred to revenues when the services are provided.





F-14







NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(U.S.
dollars in thousands, except share data, unless otherwise noted)





| | (m) | Impairment of other long-lived assets
| | --- | -------------------------------------



The carrying amounts
of long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount
of an asset may not be recoverable. Recoverability of assets to be held and used is evaluated by a comparison of the carrying amount
of assets to future undiscounted net cash flows expected to be generated by the assets. Such assets are considered to be impaired
if the sum of the expected undiscounted cash flow is less than the carrying amount of the assets. The impairment to be recognized
is measured by the amount by which the carrying amounts of the assets exceed the fair value of the assets. No impairment of other
long-lived assets was recognized for the period from November 27 to December 31, 2015 and the year ended December 31, 2016,
respectively.



| | (n) | Revenue recognition
| | --- | -------------------



Revenue is recognized
when persuasive evidence of an arrangement exists, service has been rendered, the price is fixed or determinable and collectability
is reasonably assured. Revenue is deferred until these criteria are met as described below.



Revenue presented
in the consolidation statements of comprehensive loss include revenue from domestic services primarily consisting of cleaning services
and nursing services, Ad-Hoc delivery services and other services. The Group recognizes revenue on a net basis principally because
the Group is not the primary obligor.



The Group earns commission
revenue from service providers for cleaning services orders, Ad-Hoc delivery orders and other service orders placed through the
Group’s website and mobile platforms. Commission revenue is recognized upon the completion of the services provided by the
services providers. The commission is generally determined based on certain percentage of service fees charged by service providers.



For nursing services,
the Group earns service fees from nurses and end customers. Service revenue from nurses is recognized when the Group successfully
helps nurses match with end customers. Service revenue from end consumers is recognized ratably over the contract period when nursing
services are provided.



| | (o) | Cost of revenues
| | --- | ----------------



Costs of revenues
mainly consist of costs associated with the production and operation of websites and app, which include fees paid to third parties
for internet connection and services, insurance cost, payroll-related expenses, equipment depreciation associated with the website
production and operation, and business taxes, etc.



| | (p) | Advertising expenses
| | --- | --------------------



Advertising costs
are generally prepaid to the third parties for television, internet and outdoor advertising services. Advertising costs are expensed
when the services are received. For the period from November 27 to December 31, 2015 and the year ended December 31, 2016,
advertising expenses recognized under sales and marketing expenses in the consolidated statements of comprehensive loss were US$184
and US$19,857, respectively.



| | (q) | Research and development expenses
| | --- | ---------------------------------



Research and development
expenses mainly consist of personnel, rent and depreciation expenses associated with the development of and enhancement to
the Group’s websites and expenses associated with research and development. The research and development expenses are expensed
as incurred for all the periods presented.



Costs incurred for
the preliminary project stage of internal use software are expensed when incurred in research and development expenses. Costs incurred
during the application development stage are capitalized when certain criteria are met as stated in ASC 350-40. Costs incurred
during the post-implementation-operation stage are also expensed as incurred. As the period qualified for capitalization has historically
been very short and the development costs incurred during this period have been insignificant, development costs of internal use
software to date have been expensed when incurred.



| | (r) | Operating leases
| | --- | ----------------



Leases where
substantially all the rewards and risks of ownership of assets remain with the lessors are accounted for as operating leases.
Payments made under operating leases are charged to the operating expenses in the consolidated statements of comprehensive
income/ (loss) on a straight-line basis over the terms of underlying lease.



F-15







58 Daojia Inc.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(U.S.
dollars in thousands, except share data, unless otherwise noted)





| | (s) | Share-based compensation
| | --- | ------------------------



All share-based awards
to employees and directors, including share options and restricted shares (“RSs”) are measured at the grant date based
on the fair value of the awards. Share-based compensation, net of forfeitures, is recognized as expense on a straight-line basis
over the requisite service period, which is the vesting period.



The Group uses the
binominal option pricing model to determine the fair value of share options and account for share-based compensation expenses using
an estimated forfeiture rate at the time of grant and revising the rate, if necessary, in subsequent periods if actual forfeitures
differ from initial estimates. Share-based compensation expenses are recorded net of estimated forfeitures such that expenses are
recorded only for those share-based awards that are expected to vest.



See Note 16 for
further information regarding share-based compensation assumptions and expenses.



| | (t) | Income taxes
| | --- | ------------



Current income
taxes are provided on the basis of net income for financial reporting purposes, adjusted for income and expense items which
are not assessable or deductible for income tax purposes, in accordance with the regulations of the relevant tax
jurisdictions. Deferred income taxes are provided using the asset and liability method. Under this method, deferred income
taxes are recognized for the tax consequences of temporary differences by applying enacted statutory rates applicable to
future years to differences between the financial statement carrying amounts and the tax bases of existing assets and
liabilities. The tax base of an asset or liability is the amount attributed to that asset or liability for tax purposes. The
effect on deferred taxes of a change in tax rates is recognized under income tax expense in the statement of comprehensive
income/ (loss) in the period of change. A valuation allowance is provided to reduce the amount of deferred tax assets if it is
considered more likely than not that some portion of, or all of the deferred tax assets will not be realized.



Uncertain tax positions



The guidance
prescribes a more likely than not threshold for financial statement recognition and measurement of a tax position taken or
expected to be taken in a tax return. Guidance was also provided on derecognition of income tax assets and liabilities,
classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated
with tax positions, accounting for income taxes in interim periods, and income tax disclosures. Significant judgment is
required in evaluating the Group’s uncertain tax positions and determining its provision for income taxes. The Group
recognizes interest and penalties, if any, under accrued expenses and other current liabilities on its balance sheet and
under other expenses in its statement of comprehensive income/ (loss). The Group did not have any interest or penalties
associated with tax positions as of December 31, 2015 and 2016. As of December 31, 2015 and 2016, the Group did not
have any significant unrecognized uncertain tax positions.



In order to assess
uncertain tax positions, the Group applies a more likely than not threshold and a two-step approach for the tax position measurement
and financial statement recognition. Under the two-step approach, the first step is to evaluate the tax position for recognition
by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained,
including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest
amount that is more than 50% likely of being realized upon settlement.



| | (u) | Employee benefits
| | --- | -----------------



Full-time employees
of the Group in mainland China are entitled to staff welfare benefits including pension, work-related injury benefits, maternity
insurance, medical insurance, unemployment benefit and housing fund plans through a PRC government-mandated defined contribution
plan. Chinese labor regulation requires that the Group makes contributions to the government for these benefits based on certain
percentage of the employees’ salaries, up to a maximum amount specified by the local government. Currently, the Group is
paying contributions to the social insurance plan for all full-time employees and to the housing fund plans for some employees,
but the amounts paid for these employees may not be sufficient as required by the PRC laws and regulations, for which the Group
have made provision based on its best estimate. The Group has no legal obligation for the benefits beyond the required contributions.



The Group recorded
employee benefit expenses of US$709 and US$10,127 for the period from November 27 to December 31, 2015 and the year ended December 31,
2016, respectively.



F-16







58 Daojia Inc.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(U.S.
dollars in thousands, except share data, unless otherwise noted)





| | (v) | Government grants
| | --- | -----------------



Grants from the government
are recognized at their fair value where there is a reasonable assurance that the grant will be received and the Group will comply
with all attached conditions.



Government
grants relating to costs are deferred and recognized under others, net in the consolidated statements of comprehensive
income/ (loss) over the period necessary to match them with the costs that they are intended to compensate.



Government grants
relating to the property, plant and equipment and other non-current assets are presented in the consolidated balance sheet by deducting
the grants in arriving at the assets carrying amount and are credited to operating expenses in the consolidated statements of comprehensive
income/ (loss) on a straight-line basis over the expected lives of the related assets.



For the period from
November 27 to December 31, 2015 and the year ended December 31, 2016, the Group recognized government grants of US$ nil and US$2,165,
respectively, as other income in the consolidated statements of comprehensive loss.



| | (w) | Ordinary shares
| | --- | ---------------



The Company accounts
for repurchased ordinary shares under the cost method and includes such treasury stock as a component of the common shareholders’
equity. Cancellation of treasury stock is recorded as a reduction of ordinary shares, additional paid-in capital and retained earnings,
as applicable. An excess of purchase price over par value is allocated to additional paid-in capital first with any remaining excess
charged entirely to retained earnings.



| | (x) | Statutory reserves
| | --- | ------------------



The Group’s
PRC subsidiaries, the VIE and VIE’ subsidiary in China are required to make appropriations to certain non-distributable reserve
funds.



In accordance with
China’s Company Laws, the Company’s PRC subsidiary, the VIE and VIE’ subsidiary that are Chinese companies, must
make appropriations from their after-tax profit (as determined under the Accounting Standards for Business Enterprises as promulgated
by the Ministry of Finance of the People’s Republic of China (“PRC GAAP”)) to non-distributable reserve funds
including (i) statutory surplus fund and (ii) discretionary surplus fund. The appropriation to the statutory surplus fund must
be at least 10% of the after-tax profits calculated in accordance with PRC GAAP. Appropriation is not required if the statutory
surplus fund has reached 50% of the registered capital of the respective company. Appropriation to the discretionary surplus fund
is made at the discretion of the respective company.



Pursuant to the laws
applicable to China’s Foreign Investment Enterprises, the Company’s subsidiaries that are foreign investment enterprises
in China have to make appropriations from their after-tax profit (as determined under PRC GAAP) to reserve funds including (i)
general reserve fund, (ii) enterprise expansion fund and (iii) staff bonus and welfare fund. The appropriation to the general reserve
fund must be at least 10% of the after tax profits calculated in accordance with PRC GAAP. Appropriation is not required if the
reserve fund has reached 50% of the registered capital of the respective company. Appropriations to the other two reserve funds
are at the respective company’s discretion. The use of the general reserve fund, statutory surplus fund and discretionary
surplus fund are restricted to the offsetting of losses to increase the registered capital of the respective company. These reserves
are not allowed to be transferred out as cash dividends, loans or advances, nor can they be distributed except under liquidation.



As of December 31,
2016, the Group’s PRC entities were in an accumulated loss position and no statutory fund was made accordingly.



| | (y) | Related parties
| | --- | ---------------



Parties are considered
to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence
over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject
to common control or significant influence of the same party, such as a family member or relative, shareholder, or a related corporation.



F-17







58 Daojia Inc.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(U.S.
dollars in thousands, except share data, unless otherwise noted)





| | (z) | Comprehensive income/(loss)
| | --- | ---------------------------



Comprehensive
income/(loss) is defined as the change in equity of the Group during a period arising from transactions and other events and
circumstances excluding transactions resulting from investments by shareholders and distributions to shareholders.
Comprehensive income or loss is reported in the consolidated statements of comprehensive income/ (loss). Accumulated other
comprehensive income/ (loss), as presented on the accompanying consolidated balance sheets, consists of accumulated foreign
currency translation adjustment, net of tax.



| | (aa) | Recently issued accounting pronouncements
| | ---- | -----------------------------------------



In May 2014, the FASB
issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)”. This guidance supersedes current guidance
on revenue recognition in Topic 605, “Revenue Recognition”. In addition, there are disclosure requirements related
to the nature, amount, timing, and uncertainty of revenue recognition. In August 2015, the FASB issued ASU No. 2015-14 to defer
the effective date of ASU No. 2014-09 for all entities by one year. For publicly-traded business entities that follow U.S. GAAP,
the deferral results in the new revenue standards’ being effective for fiscal years, and interim periods within those fiscal
years, beginning after December 15, 2017, with early adoption permitted for interim and annual periods beginning after December
15, 2016. The Group will apply the new revenue standard under the modified retrospective approach, effective January 1, 2018. The
cumulative effect of initially applying the guidance will be recognized at the date of initial application. The Group is currently
in the process of analyzing its revenue in accordance with the new revenue standard to determine the impact on the consolidated
financial statements and related disclosures.



In November 2015,
the FASB issued ASU No. 2015-17, “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes”, which
simplifies the presentation of deferred income taxes by requiring deferred tax assets and liabilities to be classified as noncurrent
on the balance sheet. The amendments in this update are effective for financial statements issued for annual periods beginning
after December 15, 2016, and interim periods within those annual periods. The Group is in the process of evaluating the impacts
the adoption of this update will have on its consolidated financial statements as current deferred tax assets were US$ nil and
non-current deferred tax liabilities were US$ nil as of December 31, 2016.



In January 2016, the
FASB issued ASU No.2016-01, “Recognition and Measurement of Financial Assets and Financial Liabilities”, which provides
guidance for the recognition, measurement, presentation, and disclosure of financial assets and liabilities. This amendment requires
all equity investments to be measured at fair value, with changes in the fair value recognized through net income (other than those
accounted for under equity method of accounting or those that result in consolidation of the investee). The guidance will be effective
for the fiscal year beginning after December 15, 2017, including interim periods within that year. The Group is in the process
of evaluating the impacts the adoption of this update will have on its consolidated financial statements.



In February 2016,
the FASB issued ASU No. 2016-02, “Leases (Topic 842)”, which amends the existing accounting standards for lease accounting.
For operating leases, ASU No.2016-02 requires a lessee to recognize a right-of-use asset and a lease liability, initially measured
at the present value of the lease payments, in its balance sheet with terms of more than twelve months. Lessees are permitted to
make an accounting policy election to not recognize the asset and liability for leases with a term of twelve months or less. The
standard also requires a lessee to recognize a single lease cost, calculated so that the cost of the lease is allocated over the
lease term, on a generally straight-line basis. In addition, this standard requires both lessees and lessors to disclose certain
key information about lease transactions. The amendments in this Update are effective for fiscal years beginning after December
15, 2018, including interim periods within those fiscal years. The Group is currently assessing the potential effects the adoption
of this update will have on its consolidated financial statements and related disclosures.



In March 2016, the
FASB issued ASU No. 2016-09, “Compensation—Stock Compensation (Topic 718)”, which intends to improve the accounting
for employee share-based payments. This standard addresses several aspects of the accounting for share-based payment award transactions,
including: (a) income tax consequences; (b) classification of awards as either equity or liabilities; (c) classification on the
statement of cash flows; and (d) accounting for forfeitures of share-based payments. This standard will be effective for annual
periods beginning after December 15, 2016, and interim periods within those annual periods, with early adoption permitted. The
Group is currently assessing the potential effects the adoption of this update will have on its consolidated financial statements
and related disclosures.



In June 2016, the
FASB issued ASU No. 2016-13, “Financial Instruments-Credit Losses (Topic 326)”, which requires entities to measure
all expected credit losses for financial assets held at the reporting date. This replaces the existing incurred loss model and
is applicable to the measurement of credit losses on financial assets measured at amortized cost. For available-for-sale debt securities,
entities will be required to record allowances rather than reduce the carrying amount, as they do today under other-than-temporary
impairment model. For public business entities, the amendments in this Update are effective for fiscal years beginning after December
15, 2019, including interim periods within those fiscal years. The Group is currently evaluating the impact that the adoption of
this update will have on its consolidated financial statements and related disclosures.





F-18







58 Daojia Inc.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(U.S.
dollars in thousands, except share data, unless otherwise noted)





In August 2016, the
FASB issued ASU No. 2016-15, “Statement of Cash Flows – Classification of Certain Cash Receipts and Cash Payments”,
which addresses the following eight specific cash flow issues: debt prepayment or debt extinguishment costs; settlement of zero-coupon
debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest
rate of the borrowing; contingent consideration payments made after a business combination; proceeds from the settlement of insurance
claims; proceeds from the settlement of corporate-owned life insurance policies (COLIs) (including bank-owned life insurance policies
(BOLIs)); distributions received from equity method investees; beneficial interests in securitization transactions; and separately
identifiable cash flows and application of the predominance principle. The amendments in this Update are effective for public business
entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted.
The Group is currently evaluating the impact that the adoption of this update will have on its consolidated financial statements
and related disclosures.



In November 2016,
the FASB issued ASU No. 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash”. The guidance requires that
a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described
as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash
equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total
amounts shown on the statement of cash flows. The amendments in this Update are effective for public business entities for fiscal
years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including
adoption in an interim period. The standard should be applied using a retrospective transition method to each period presented.
The Group is currently evaluating the impact that the adoption of this update will have on its consolidated financial statements.



3. Credit risks and concentration



|(a) | Credit risk
|--- | -----------



The Group’s
credit risk arises from cash, term deposits, short-term investments, as well as credit exposures to receivables due from its customers,
equity investee and other parties.



The Group believes
that there is no significant credit risk associated with cash and term deposits which were held by reputable financial institutions
in the jurisdictions where the Company, its subsidiaries, the VIE and VIE’s subsidiary are located.



The Group has no significant
concentrations of credit risk with respect to its customers. The Group assesses the credit quality of and sets credit limits on
its customers by taking into account their financial position, the availability of guarantees from third parties, their credit
history and other factors such as current market conditions.



|(b) | Major customers
|--- | ---------------



There was no customer
whose revenue represented over 10% of total revenues for the period from November 27 to December 31, 2015 and for the year ended
December 31, 2016, respectively.



The accounts receivable
from one Internet Company represented approximately 19% and 65% of total accounts receivable as of December 31, 2015 and 2016,
respectively. No other customer has receivables representing over 10% of total accounts receivable.



|(c) | Foreign currency risk
|--- | ---------------------



The Group’s
operating transactions are mainly denominated in RMB. RMB is not freely convertible into foreign currencies. The value of the RMB
is subject to changes by the central government policies and to international economic and political developments. In the PRC,
certain foreign exchange transactions are required by law to be transacted only by authorized financial institutions at exchange
rates set by the People’s Bank of China (the “PBOC”). Remittances in currencies other than RMB by the Group
in China must be processed through the PBOC or other China foreign exchange regulatory bodies which require certain supporting
documentation in order to effect the remittance.





F-19









58 Daojia Inc.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(U.S.
dollars in thousands, except share data, unless otherwise noted)





4. Accounts receivable, net



Accounts receivable,
net, consists of the following:



|                               |  | As of December 31,
|------------------------------ |  | ------------------
|                               |  | 2015              
|                               |  | (Unaudited)       
|                               |  |                   
|Accounts receivable            |  |                   
|Allowance of doubtful accounts |  |                   
|Accounts receivable, net       |  |                   





5. Prepayments and other current assets



The following is a
summary of prepayments and other current assets:





|                                            |  | As of December 31,
|------------------------------------------- |  | ------------------
|                                            |  | 2015              
|                                            |  | (Unaudited)       
|                                            |  |                   
|Receivables from online payment platforms   |  |                   
|Loan receivables from an equity investee    |  |                   
|Freight disbursement on behalf of customers |  |                   
|Input value-added tax                       |  |                   
|Rental and other deposits                   |  |                   
|Prepaid advertising fees                    |  |                   
|Interest receivable                         |  |                   
|Advances to suppliers                       |  |                   
|Consumables                                 |  |                   
|Others                                      |  |                   
|Total                                       |  |                   





6. Property and equipment, net



The following is a
summary of property and equipment, net:



|                               |  | As of December 31,
|------------------------------ |  | ------------------
|                               |  | 2015              
|                               |  | (Unaudited)       
|                               |  |                   
|Computers and equipment        |  |                   
|Furniture and fixtures         |  |                   
|Leasehold improvements         |  |                   
|Software                       |  |                   
|Total                          |  |                   
|Less: Accumulated depreciation |  |                   
|Net book value                 |  |                   



Depreciation expenses
for the period from November 27 to December 31, 2015 and the year ended December 31, 2016 were US$49 and US$1,622, respectively.





F-20









58 Daojia Inc.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(U.S.
dollars in thousands, except share data, unless otherwise noted)



7. Intangible assets, net



The following is a
summary of intangible assets, net:



|                               |  | As of December 31,
|------------------------------ |  | ------------------
|                               |  | 2015              
|                               |  | (Unaudited)       
|                               |  |                   
|Domain names                   |  |                   
|Total                          |  |                   
|Less: Accumulated amortization |  |                   
|Net book value                 |  |                   



Amortization expenses
for the period from November 27 to December 31, 2015 and the year ended December 31, 2016 were US$7 and US$116, respectively. During
the same periods, no impairment was recognized in the consolidated statements of comprehensive loss.



The estimated aggregate
amortization expenses for each of the five succeeding fiscal years and thereafter are as follows:



|                                      |  | Amounts
|------------------------------------- |  | -------
|                                      |  |        
|For the year ending December 31, 2016 |  |        
|2017                                  |  |        
|2018                                  |  |        
|2019                                  |  |        
|2020                                  |  |        
|2021                                  |  |        
|Thereafter                            |  |        
|Total                                 |  |        



8. Long-term investments



The following is a
summary of long-term investments:



|                                        |  | As of December 31,
|--------------------------------------- |  | ------------------
|                                        |  | 2015              
|                                        |  | (Unaudited)       
|                                        |  |                   
|Cost method investments:                |  |                   
|Investee A (a)                          |  |                   
|Investee B (b)                          |  |                   
|Investee C (c)                          |  |                   
|Investee D (d)                          |  |                   
|Others (e)                              |  |                   
|Total cost method long-term investments |  |                   



(a)           In
2015, the Group acquired shares of investee A for cash consideration of US$1,848 (RMB12,000). Investee A is mainly engaged in the
business of providing make up services. The investment is accounted for under cost method as the shares invested by the Group were
not considered as in-substance common stock and the shares do not have readily determinable fair value.



(b)           In
2015, the Group acquired shares of investee B for cash consideration of US$1,740 (RMB11,300). Investee B is mainly engaged in the
business of providing health care services. The investment is accounted for under cost method as the shares invested by the Group
were not considered as in-substance common stock and the shares do not have readily determinable fair value.



F-21







58 Daojia Inc.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(U.S.
dollars in thousands, except share data, unless otherwise noted)





(c)           In
2015, the Group acquired shares of investee C for cash consideration of US$9,240 (RMB60,000). In 2016, the Group acquired additional
shares of investee C with a total consideration of US$1,381 (RMB 9,049). Investee C is mainly engaged in the business of providing
car wash services. The investment is accounted for under cost method as the shares invested by the Group were not considered as
in-substance common stock and the shares do not have readily determinable fair value as of December 31, 2016. In the fourth quarter
of 2016, the Group assessed its investment in investee C for impairment due to the deterioration of Company C’s economic
performance and it was not expected to be recovered in the foreseeable future considering the overall performance of the car wash
industry. After the completion of the impairment analysis with the assistance of a third party valuation specialist, the Group
noted that the fair value of investee C decreased significantly and such decrease was considered to be other than temporary. As
a result, the Group recognized a full impairment of US$9,981 in 2016.



(d)           In
2016, the Group acquired shares of investee D for cash consideration of US$2,745 (RMB19,040). Investee D is mainly engaged in the
business of providing catering services. The investment is accounted for under cost method as the shares invested by the Group
were not considered as in-substance common stock and the shares do not have readily determinable fair value.



(e)           Others
represent other cost method investments with individual carrying amount less than US$810 as of December 31, 2015 and 2016, respectively.



9. Long-term prepayments



The following is a
summary of long-term prepayments:



|                                                  |  | As of December 31,
|------------------------------------------------- |  | ------------------
|                                                  |  | 2015              
|                                                  |  | (Unaudited)       
|                                                  |  |                   
|Long-term prepaid advertising fees                |  |                   
|Long-term prepaid rental                          |  |                   
|Prepayment for purchase of property and equipment |  |                   
|Total                                             |  |                   



10. Accounts payable



The following is a
summary of accounts payable:



|                                               |  | As of December 31,
|---------------------------------------------- |  | ------------------
|                                               |  | 2015              
|                                               |  | (Unaudited)       
|                                               |  |                   
|Payable for advertisement fees                 |  |                   
|Payable for services fees                      |  |                   
|Payable for purchase of property and equipment |  |                   
|Others                                         |  |                   
|Total                                          |  |                   



11. Accrued expenses and other current liabilities



The following is a
summary of accrued expenses and other current liabilities:



|                                     |  | As of December 31,
|------------------------------------ |  | ------------------
|                                     |  | 2015              
|                                     |  | (Unaudited)       
|                                     |  |                   
|Payable to 58 Home service providers |  |                   
|Customer membership card deposits    |  |                   
|Deposits from service providers      |  |                   
|Accrued office expenses              |  |                   
|Others                               |  |                   
|Total                                |  |                   





F-22







58 Daojia Inc.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(U.S.
dollars in thousands, except share data, unless otherwise noted)



12. Fair value measurements



Measured on recurring basis



The Group measured
its financial assets including term deposits and short-term investments at fair value on a recurring basis as of December 31, 2015
and 2016. The following table sets forth the financial instruments, measured at fair value at recurring basis, by level within
the fair value hierarchy:



|                                      |  |                                               |  | As of December 31,
|------------------------------------- |  | --------------------------------------------- |  | ------------------
|Financial instruments                 |  | Fair value hierarchy                          |  | 2015              
|                                      |  |                                               |  | (Unaudited)       
|                                      |  |                                               |  |                   
|Term deposits                         |  | Significant other observable inputs (Level 2) |  |                   
|Short-term investments:               |  |                                               |  |                   
|- Variable-rate financial instruments |  | Significant other observable inputs (Level 2) |  |                   



Term deposits and
variable-rate financial instruments



The Group measures
term deposits and variable-rate financial instruments at fair value based on the pervasive interest rates in the market, which
are also the interest rates as stated in the contracts with the banks. The Group classifies the valuation techniques that use the
pervasive interest rates input as Level 2 of fair value measurements. Generally there are no quoted prices in active markets for
identical time deposits at the reporting date. In order to determine the fair value, the Group must use the discounted cash flow
method and observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for
identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable
market data for substantially the full term of the assets or liabilities.



The variable-rate
financial instruments represent investments in wealth management products with variable interest rates or principal non-guaranteed
which were purchased from commercial banks and other financial institutions. The fair values are based on cash flow discounted
using the judgment that expected return will be obtained upon maturity. The Group classifies the valuation techniques as Level
2 of fair value measurement.



The following are
other financial instruments not measured at fair value in the balance sheets but for which the fair value is estimated for disclosure
purposes.



Short-term receivables
and payables



Accounts receivable
and prepaid expenses and other current assets are financial assets with carrying values that approximate fair value due to their
short term nature. Accounts payable and accrued expenses and other current liabilities are financial liabilities with carrying
values that approximate fair value due to their short term nature. The Group estimates fair values of short-term receivables and
payables and classifies the valuation technique as Level 3 of fair value measurement, as it uses estimated cash flow input which
is unobservable in the market.



Non-current assets



Non-current assets
of receivables for rental deposits is a financial asset with carrying value that approximate fair value due to the impact of discounting
is immaterial. The Group estimated fair values of non-current assets using the discounted cash flow method. The Group classifies
the valuation technique as Level 3 of fair value measurement, as it uses estimated cash flow input which is unobservable in the
market.



Measured on non-recurring basis



The Group’s
non-financial assets, such as long-term investments and intangible assets would be measured at fair value only if they were determined
to be impaired.





F-23







58 Daojia Inc.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(U.S.
dollars in thousands, except share data, unless otherwise noted)





Long-term investments



As of December 31,
2015 and 2016, the Group had US$13,690 and US$7,199, respectively, long-term investments in equity securities of privately-held
companies. Such investments are reviewed periodically for impairment using fair value measurement which requires significant unobservable
inputs (Level 3). An impairment charge of US$9,981 was recorded in the consolidated statements of comprehensive loss for the year
ended December 31, 2016. No impairment charges were recorded for the period from November 27 to December 31, 2015.



13. Income taxes



British Virgin
Islands (“BVI”)



The Group is exempted
from income tax in the BVI on its foreign-derived income. There are no withholding taxes in the BVI.



Hong Kong



Entities incorporated
in Hong Kong are subject to Hong Kong profit tax at a rate of 16.5% since January 1, 2010. The Hong Kong entity operations
were immaterial for the period from November 27 to December 31, 2015 and for the year ended December 31, 2016.



PRC



On March 16,
2007, the National People’s Congress of PRC enacted an Enterprise Income Tax Law (“EIT Law”), under which
FIEs and domestic companies would be subject to EIT at a uniform rate of 25%. The EIT law became effective on January 1, 2008.



According to
a policy promulgated by the State Tax Bureau of the PRC and effective from 2008 onwards, enterprises engaging in research and development
activities are entitled to claim 150% of the research and development expenses so incurred in a year as tax deductible expenses
in determining its tax assessable profits for that year (“Super Deduction”). Beijing 58 home and Tianjin 58 home had
claimed such Super Deduction in ascertaining its tax assessable profits for the loss for the period from November 27 to December
31, 2015 and the year ended December 31, 2016, respectively.



The EIT Law also provides
that an enterprise established under the laws of a foreign country or region but whose “de facto management body” is
located in the PRC be treated as a resident enterprise for PRC tax purposes and consequently be subject to the PRC income tax at
the rate of 25% for its global income. The Implementing Rules of the EIT Law merely define the location of the “de facto
management body” as “the place where the exercising, in substance, of the overall management and control of the production
and business operation, personnel, accounting, properties, etc., of a non-PRC company is located.” Based on a review of surrounding
facts and circumstances, the Company does not believe that it is likely that its operations outside of the PRC should be considered
a resident enterprise for PRC tax purposes.



The EIT Law also imposes
a withholding income tax of 10% on dividends distributed by an FIE to its immediate holding company outside of China, if such immediate
holding company is considered as a non-resident enterprise without any establishment or place within China or if the received dividends
have no connection with the establishment or place of such immediate holding company within China, unless such immediate holding
company’s jurisdiction of incorporation has a tax treaty with China that provides for a different withholding arrangement.
The British Virgin Island, where the Company was incorporated, does not have such tax treaty with China. According to the arrangement
between Mainland China and Hong Kong Special Administrative Region on the Avoidance of Double Taxation and Prevention of Fiscal
Evasion in August 2006, dividends paid by an FIE in China to its immediate holding company in Hong Kong will be subject to
withholding tax at a rate of no more than 5% (if the foreign investor owns directly at least 25% of the shares of the FIE).
The Group’s subsidiaries and the VIE were in accumulated loss positions as of December 31, 2016. Accordingly, no deferred
income tax was accrued and required to be accrued as of December 31, 2016.



There
were no current tax expense or benefit or deferred tax expense or benefit for the period from November 27 to December 31, 2015
and for the year ended December 31, 2016.



F-24









58 Daojia Inc.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(U.S.
dollars in thousands, except share data, unless otherwise noted)





The following table
sets forth reconciliation between the statutory EIT rate and the effective tax rate:



|                                                 |  | For the period
                                                                                from November
                                                                                27 to December
                                                                                31, 2015 |             | For the year
                                                                                ended
                                                                                December 31,
                                                                                2016
|------------------------------------------------ |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                 |  |                                                                                                                                                                                                                                                                                                      | (Unaudited) |                                                                                                                                                                                                                                                                                     
|                                                 |  |                                                                                                                                                                                                                                                                                                      |             |                                                                                                                                                                                                                                                                                     
|Statutory income tax rates                       |  |                                                                                                                                                                                                                                                                                                      | 25.0        | %                                                                                                                                                                                                                                                                                   
|Change in valuation allowance                    |  |                                                                                                                                                                                                                                                                                                      | (19.9       | )%                                                                                                                                                                                                                                                                                  
|Permanent book-tax differences                   |  |                                                                                                                                                                                                                                                                                                      | (5.3        | )%                                                                                                                                                                                                                                                                                  
|Effect of lower tax rates in other jurisdictions |  |                                                                                                                                                                                                                                                                                                      | 0.2         | %                                                                                                                                                                                                                                                                                   
|Effective tax rate                               |  |                                                                                                                                                                                                                                                                                                      | —           | %                                                                                                                                                                                                                                                                                   



Deferred tax
assets



The following table
sets forth the significant components of the aggregate deferred tax assets and liabilities:



|                                                  |  | As of December 31,
|------------------------------------------------- |  | ------------------
|                                                  |  | 2015              
|                                                  |  | (Unaudited)       
|                                                  |  |                   
|Deferred tax assets                               |  |                   
|Current:                                          |  |                   
|Accrued payroll and other expenses                |  |                   
|Less: valuation allowance                         |  |                   
|Total current deferred tax assets, net            |  |                   
|Non-current:                                      |  |                   
|Net operating loss carry forwards                 |  |                   
|Advertising expenses in excess of deduction limit |  |                   
|Less: valuation allowance                         |  |                   
|Total non-current deferred tax assets, net        |  |                   
|Total deferred tax assets, net                    |  |                   



A valuation allowance
is provided against deferred tax assets when the Group determines that it is more likely than not that the deferred tax assets
will not be utilized in the future. In making such determination, the Group evaluates a variety of factors including the Group’s
operating history, accumulated deficit, existence of taxable temporary differences and reversal periods.



As of December 31,
2016, the Group had net operating loss carry forwards of US$155,208 which will expire during the period between December 31, 2017
and December 31, 2021. There is no expiration for the advertising expenses that were in excess of annual deduction limit and carried
forward.



The Group has incurred
net accumulated operating losses for income tax purposes since its inception. The Group believes that it is more likely than not
that these net accumulated operating losses and other deferred tax assets will not be utilized in the future. Therefore, the Group
had provided valuation allowances of US$24,744 and US$43,627 for the deferred tax assets as of December 31, 2015 and 2016, respectively.



F-25







58 Daojia Inc.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(U.S.
dollars in thousands, except share data, unless otherwise noted)





Movement of valuation allowance



|                                   |  | For the period
                                                                                from November
                                                                                27 to December
                                                                                31, 2015 |             | For the
                                                                                year
                                                                                ended
                                                                                December
                                                                                31, 2016
|---------------------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                   |  |                                                                                                                                                                                                                                                                                                      | (Unaudited) |                                                                                                                                                                                                                                                                                                                                                                     
|                                   |  |                                                                                                                                                                                                                                                                                                      |             |                                                                                                                                                                                                                                                                                                                                                                     
|Balance at beginning of the period |  |                                                                                                                                                                                                                                                                                                      | 20,941      |                                                                                                                                                                                                                                                                                                                                                                     
|Provision                          |  |                                                                                                                                                                                                                                                                                                      | 3,803       |                                                                                                                                                                                                                                                                                                                                                                     
|Balance at the end of the period   |  |                                                                                                                                                                                                                                                                                                      | 24,744      |                                                                                                                                                                                                                                                                                                                                                                     



14. Preferred shares



On November 27, 2015,
the Company completed a Series A round of equity financing, with participation from Alibaba Group Holding Limited, global investment
firm KKR, and Ping An Group. Following the closing of the Series A financing, 58.com Inc. holds 87.9% of the total outstanding
ordinary shares of the Company and 61.7% of the total outstanding shares of the Company on an as-converted basis.



On July 8, 2016, a
4-for-1 stock split for all ordinary shares and Series A preferred shares was approved by the shareholders. While the stock split
increased the number of shares for each shareholder, the percentage of their ownership in the Company was not affected. This share
split has been retrospectively reflected for all periods presented.



The Group’s
preference shares comprised the following:

|       |  |                   |  |                       |        | Shares     |  |                       
|------ |  | ----------------- |  | --------------------- | ------ | ---------- |  | ----------------------
|Series |  | Date of Issuance  |  | Issue Price Per Share |        | Authorized |  | Issued and Outstanding
|       |  |                   |  |                       |        |            |  |                       
|A      |  | November 27, 2015 |  |                       | 1.8382 |            |  |                       



Key terms of the Series
A Preferred Shares are summarized as follows:



Dividend rights

The holders of the
Series A Shares shall be entitled to noncumulative dividends in preference to any dividend on the ordinary shares at the rate of
5% per annum of Series A Shares issue price. After payment of all declared dividends on the Series A Shares has been paid or set
aside for payment to the holders of Series A Shares in a calendar year, any additional dividends declared shall be distributed
among all holders of Ordinary Shares. All Shareholders shall also be entitled to receive any non-cash dividends declared by the
Board pursuant to the foregoing distribution priority.



Liquidation preference

In the
event of a liquidation, each holder of the Series A Shares then outstanding shall be entitled to receive, prior to any distribution
or payment to any holder of Ordinary Shares or any other shares, an amount per Series A Preferred Share equal to the greater of
(i) the sum of (a) one hundred and twenty percent (120%) of Series A Preferred Share Issue Price, plus (b) any dividends declared
and unpaid with respect to each Series A Share, and (ii) such amount per share as would have been payable had all funds and assets
legally available for distribution to the shareholders been distributed pro rata among the holders of Series A Shares (on an as
converted basis) and Ordinary Shares immediately following the liquidation. In the event that available assets are insufficient
to permit payment of the Series A Preferred Share Preference Amount in full to all holders of Series A Shares, then the assets
of the Company shall be distributed ratably to the Series A Preferred Shares holders based on their proportionate share ownership.



Redemption rights



There is no redemption
right with respect to the Series A Preferred Share. However, if the Company grants any investor redemption rights in any future
financing, each holder of Series A Preferred Shares shall have the same redemption rights automatically without further consideration.





F-26







58 Daojia Inc.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(U.S.
dollars in thousands, except share data, unless otherwise noted)





Conversion rights



Each of the Series A
Preferred Shares is convertible into the number of fully-paid ordinary shares as determined by dividing the original issue price
applicable to such preferred shares by the conversion price in effect at that time. The initial conversion ratio for Series A
Preferred Shares to Class A ordinary shares shall be 1:1 adjusted for share splits, share dividends, recapitalization and
similar transactions.



The Series A
Preferred Shares shall automatically be converted into ordinary shares at the conversion price in effect upon the closing of a
Qualified IPO.



Voting rights



Each Series A
Preferred Share conveys the voting right of one vote for each Class A ordinary share into which such Series A Preferred Shares
can be converted.



15. Ordinary shares



The Company was incorporated
in the British Virgin Islands in January 2015. The Company is authorized to issue a maximum of 640,800,000 shares with a par value
of US$0.00001 per share. As of December 31, 2015, 83,100,000 Class A ordinary shares, 1,880,000 Class B ordinary shares and 6,000,000
Class C ordinary shares were issued.



On July 8, 2016, a
4-for-1 stock split for all ordinary shares and Series A preferred shares was approved by the shareholders. While the stock split
increased the number of shares for each shareholder, the percentage of their ownership in the Company was not affected. This share
split has been retrospectively reflected for all periods presented. The authorized 640,800,000 shares were divided into 2,563,200,000
shares including 163,200,000 preferred shares in connection with the issuance of Series A preferred shares with a par value of
US$0.0000025 per share.



Under share repurchase
agreement approved by the Company’s board of directors on July 4, 2016, the Company repurchased 12,400,000 Class A ordinary
shares from a shareholder for total considerations of $1,508.



In September 2016,
the Company granted 12,400,000 RSs to a senior management member of the Company at the fair value of US$0.99 per share, which was
fully vested on the grant date.



As of December 31,
2016, 320,000,000 Class A ordinary shares, 7,520,000 Class B ordinary shares and 36,400,000 Class C ordinary shares were issued.



16. Share-based compensation



In February 2015,
the Company adopted its 2015 Share Incentive Plan, or the 58 Home 2015 Plan. The maximum aggregate number of shares which may be
issued pursuant to all awards under the 58 Home 2015 Plan is 80,000,000 ordinary shares of 58 Home. The 58 Home 2015 Plan permits
the awards of options and restricted shares. Unless terminated earlier, the 58 Home 2015 Plan will terminate automatically in 2025.
In connection with the Series A round of equity financing closed on November 27, 2015, the maximum aggregate number of shares which
may be issued under the 58 Home 2015 Plan was increased by 8,000,000 ordinary shares of 58 Home.



A summary of the 58
Home’s share option activities for the year ended December 31, 2016 is presented below:



|                                    |  |           |            | Weighted |  | Weighted         |      |          
|----------------------------------- |  | --------- | ---------- | -------- |  | ---------------- | ---- | ---------
|                                    |  |           |            | Average  |  | Average          |      | Aggregate
|                                    |  | Number of |            | Exercise |  | Remaining        |      | Intrinsic
|                                    |  | Options   |            | Price    |  | Contractual Life |      | Value    
|                                    |  |           |            |          |  |                  |      |          
|Outstanding as of December 31, 2015 |  |           | 31,768,000 |          |  |                  | 0.03 |          
|Granted                             |  |           | 8,016,000  |          |  |                  | 0.92 |          
|Forfeited                           |  |           | (2,968,000 | )        |  |                  | 0.03 |          
|Outstanding as of December 31, 2016 |  |           | 36,816,000 |          |  |                  | 0.22 |          





F-27









58 Daojia Inc.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(U.S.
dollars in thousands, except share data, unless otherwise noted)





In February 2015,
58 Home granted 36,400,000 RSs to selected management members of 58 Home. In April 2015, 58 Home further granted 7,520,000 RSs
to a senior management member of the Company under the 58 Home 2015 Plan. All of these RSs were fully vested on the respective
grant dates. Share-based compensation expense amounted to US$1,978 was recognized during the year ended December 31, 2015 with
respect to the grant of the RSs.



In September 2016,
the Company granted 2,800,000 share options to certain employees at the exercise price of US$0.92 per share, where 50% of the options
shall be vested upon the second anniversary of grant date and remaining shall vest every six months thereafter in four equal installments.
In September 2016, the Company granted 12,400,000 RSs to a senior management member of the Company at the fair value of US$0.99
per share, which was fully vested on the grant date.



In October 2016, the
Company granted 5,216,000 share options to certain employees at the exercise price of US$0.92 per share, where 50% of the options
shall be vested upon the second anniversary of grant date and remaining shall vest every six months thereafter in equal installments.



The weighted average
grant date fair value of options granted for the year ended December 31, 2016 was US$0.59 per share.



Valuation Assumptions:
The Group estimated the fair value of share options using the Binominal option-pricing model with the assistance from an independent
valuation firm.



The fair value of
each option grant under the 58 Home 2015 Plan was estimated on the date of grant with the following assumptions:



|                                                                       |  | 2015 |              |   | 2016 | 
|---------------------------------------------------------------------- |  | ---- | ------------ | - | ---- | 
|Expected volatility                                                    |  |      | 59.40%-60.00 | % |      | 
|Risk-free interest rate (per annum)                                    |  |      | 2.46%-2.63   | % |      | 
|Exercise multiple                                                      |  |      | 2.0-2.8      |   |      | 
|Expected dividend yield                                                |  |      | 0.00         | % |      | 
|Expected term (in years)                                               |  |      | 10           |   |      | 
|Expected forfeiture rate (post-vesting)                                |  |      | 0.25         | % |      | 
|Fair value of the underlying shares on the date of option grants (US$) |  |      | 0.18-0.36    |   |      | 



The Group estimated
the risk free rate based on the yield to maturity of US treasury bonds denominated in US$ at the option valuation date. The exercise
multiple is estimated as the ratio of fair value of underlying shares over the exercise price as at the time the option is exercised,
based on a consideration of research study regarding exercise pattern based on historical statistical data. Expected term is the
contract life of the option. The expected volatility at the date of grant date and each option valuation date was estimated based
on the historical stock prices of comparable companies. The Group has never declared or paid any cash dividends on its capital
stock, and the Group does not anticipate any dividend payments on its ordinary shares in the foreseeable future.



Share-based compensation
expenses for the share-based awards which are based on service conditions are recognized using the straight-line attribution approach.



For the period from
November 27 to December 31, 2015 and the year ended December 31, 2016, the Group recognized share-based compensation expenses
of US$25 and US$13,407, respectively for share options and RSs granted.



As of December 31,
2016, there were a total of US$4,962 unrecognized compensation expenses, adjusted for estimated forfeitures, related to non-vested
share-based compensation arrangement under the 2015 Plan. The expense is expected to be recognized over a weighted average period
of 3.17 years. Total unrecognized compensation expenses may be adjusted for future changes in estimated forfeitures.



17. Commitments and contingencies



|(a) | Commitments
|--- | -----------



The Group leases its
facilities and offices under non-cancelable operating lease agreements. The rental expenses were US$389 and US$5,435 during the
period from November 27 to December 31, 2015 and the year ended December 31, 2016, respectively, and were charged to the statements
of comprehensive loss when incurred.





F-28







58 Daojia Inc.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(U.S.
dollars in thousands, except share data, unless otherwise noted)







Certain of these arrangements
have renewal or expansion options and adjustments for market provisions, such as free or escalating base monthly rental payments.
The Group recognizes rental expense under such arrangements on the straight-line basis over the initial term of the lease. The
difference between the straight-line expense and the cash paid for rent was recorded as prepaid rent.



As of December 31,
2016, future minimum commitments under non-cancelable agreements were as follows:



|                            |  | 2017 |       | 2018 |  | 2019 |       | 2020 |  | 2021 |       | Thereafter |  | Total
|--------------------------- |  | ---- | ----- | ---- |  | ---- | ----- | ---- |  | ---- | ----- | ---------- |  | -----
|                            |  |      |       |      |  |      |       |      |  |      |       |            |  |      
|Operating lease commitments |  |      | 4,244 |      |  |      | 2,348 |      |  |      | 1,890 |            |  |      





Other than those shown
above, the Group did not have any significant capital and other commitments, long-term obligations, or guarantees as of December 31,
2016.



|(b) | Contingencies
|--- | -------------



The Group is not currently
a party to, nor is aware of, any legal proceeding, investigation or claim which is likely to have a material adverse effect on
the Group’s business, financial condition, results of operations, or cash flows. The Group did not record any legal contingencies
as of December 31, 2016.



18. Subsequent Event



The Company has considered
subsequent events through June 28, 2017, which was the date these financial statements were issued. No material events had occurred
within this period.







F-29