Used cars, used cars, Unicorn startups: Cars24 raises $ 450 million in biggest funding round


(From left to right) Co-founders of Cars24 Gajendra Jangid, Ruchit Agarwal, Mehul Agrawal and Vikram Chopra
Image: Amit Verma

OUsed car and bicycle sales unicorn nline Cars24 has raised $ 450 million (Rs 3,685 crore) as part of the Series F funding round, which includes $ 340 million (Rs 2,506 crore) in equity led by DST Global, Falcon Edge and SoftBank Vision Fund 2, and $ 110 million (Rs 811 crore) in debt from diversified financial institutions. The latest cycle, the largest for the six-year startup, also saw participation from Tencent and existing investors such as Moore Strategic Ventures and Exor Seeds.

The investment would be used to expand the global presence as well as accelerate cars, bikes and fundraising activities in India.

“Our business is capital intensive,” says Vikram Chopra, co-founder and CEO of Cars24 in an exclusive interaction with Forbes India. Cars24 has a reconditioning capacity of over 20,000 cars in Delhi, Mumbai, Bengaluru and Hyderabad. The company, he says, needs a lot of capital investment to set up warehouses, reconditioning units and logistics to move the cars. “In the past three months, business in India has grown by 50%,” he says. The company, he claims, has a turnover of over $ 1 billion (Rs 7,370 crore).

Cars24’s international activities, which started earlier this year with the United Arab Emirates and Australia, also peaked. “They now represent 10% of income,” says Chopra.

The vertical cycling, which debuted this year in Delhi, is gaining momentum. “We have sold over 1,000 bikes so far,” said Chopra, who raised $ 110 million (Rs811 crore) in debt, pummeled in the last round of funding. “Now people can more accurately assess the value of the asset, given that our inventory is huge,” he explains, adding that Cars24 is the largest used car owner in India. While stressing that an initial public offering (IPO) makes strategic sense for the company, Chopra emphasizes that the company is not yet ready to go down the IPO route. “There might be a window for an IPO in the future,” he says.
Investors are optimistic about the dominance of the used unicorn in the segment. “They have become the clear leader in the used car industry in India,” said Rahul Mehta, Managing Partner at DST Global. Cars24’s early traction in international markets, he says, is exceeding expectations. “We like to support founders who are bold and ambitious thinkers,” he adds.
Navroz D Udwadia, co-founder of Falcon Edge Capital, highlights the company’s aggressive scaling up during the pandemic. According to him, Cars24 has strengthened its first-mover advantage by building wide supply-side ditches, which in turn stimulate demand. “It’s rare to find a company so focused on the consumer experience and committed to making sure it’s exceptional through the use of data science and technology,” he says.
Chopra, for her part, explains how the pandemic has provided much needed tailwind for the used car market. “In our business, the biggest problem is not the conversion, but the testing,” he says. It is only when a consumer tries to buy or sell a car online that they discover the ease of transaction, the efficiency of going online and the impact of the platform in guaranteeing an experience. hassle-free. “During Covid-19, people started connecting and there was a huge spike in traffic,” he says, adding that the company would remain focused on its core business rather than trying to do multiple things. like auto insurance. “Despite being the leader, the room for growth is enormous. We have a long way to go, ”said Chopra.

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