India’s unicorn startup Cars24, a car buying and selling platform, raised USD 450 Million in its Series F funding. The investment includes 110 Million of debt from various financial institutions. This equity funding round was backed by SoftBank Vision Fund 2, DST global, Tencent, and Falcon Edge. The round also included existing investors such as Exor Seeds and Moore Strategic Ventures. The latest funding will double its valuation to USD 1.84 Billion.
Since the outbreak of the COVID-19 pandemic, the disposable income among individuals has plummeted, especially in emerging economies. This, in turn, has disrupted the sales of automobiles. In addition to this, the chip shortage across the globe has forced automobile manufacturers to reduce their car production and increase the price of vehicles. This factor has positively influenced the second-hand car or car resale market.
Cars24 said that it will use this funding to expand its markets in the UAE and Australia. It will also strive to makes it financing business more robust in India. Moreover, the company will invest the money on technology to improve its selling process and enhance customer’s experience on the platform. “Buying or selling a car is hard anywhere in the world,” Vikram Chopra, co-founder and CEO, said in a statement. “It’s just a broken experience everywhere, so we are trying to solve for this.”
The top-rated car marketplace has its presence in over 200 cities and has sold around 400,000 cars to date. Its website is witnessing more than 13 million hits per month. The company has already sold over 1,000 cars in UAE in six months. It launched its platform in the country this year. Cars24 was founded in 2015 by Mehul Agrawal, Gajendra Jangid, Ruchit Agarwal, and Vikram Chopra in Gurugram (Gurgaon), India. Chopra said that the car resale market in India is around USD 25 Billion, but can expand to USD 100 Billion. In an interview, he didn’t mention the projected timeline of the market expansion.
What do Investors Say About the Growth Journey of Cars24?
“Cars24 is at the forefront of transforming the way consumers buy and sell cars by providing a unique end-to-end digital shopping and transaction experience. They have emerged as the undisputed leader in the used car space in India and early traction in international markets is exceeding expectations. We love backing founders who are bold and ambitious thinkers and couldn’t be more excited to enter the second innings of our long-lasting partnership with CARS24,” Rahul Mehta, Managing Partner at DST Global said in a statement.
Navroz D. Udwadia, co-founder of Falcon Capital, said “It is rare to find a business as focused on the consumer experience and as driven to ensure it is outstanding via the use of data science and technology. Finally, we are deeply impressed by the founders’ leadership, and are thrilled to back them as they transform the used car industry in India and scale internationally across MENA and SE Asia.” While Munish Verma, manager partner, Softbank Investment Advisers said in a statement that “We believe Cars24 is enhancing the customer experience in the used car industry with its sharp focus on technology.”
The testament by investors confirms that they are confident about the success of the company, which will be driven by data and technology. According to Cars24 CEO, only 2 out of 100 people in India own a car. This number provides lucrative opportunities for similar companies in India. Recently, India’s similar car resale platform raised USD 403 Million through IPO. It’s only the company in this business segment that has gone public in India. According to some reports, Cars24 is also planning to go public in the next 18-24 months.