Cars24 set to pick up $80 million from backers
Cars24 is also in advanced stages of discussions with multiple potential new investors, who are likely to put in another $25-30 million into the company.
Existing institutional investors of the Gurgaon-based firm will be leading the new round, according to three sources aware of the developments. The three-year-old venture counts marquee investors like Sequoia Capital, Cayman Islands-based Kingsway FCI Fund and Toronto-based KCK Global, among its list of backers, and they are expected to put in $45-50 million into the company.
The company also counts Exor Seeds, a fund associated with EXOR N.V, one of Europe’s leading diversified holding companies and which is controlled by the Agnelli Family and Apoletto Asia, an investment vehicle associated with Russian billionaire Yuri Milner’s DST Global, among its backers. When contacted by ET, Cars24 spokesperson declined to comment, while an email sent to Sequoia Capital did not receive any response at the time of going to press.
Additionally, Cars24 is also in advanced stages of discussions with multiple potential new investors, who are likely to put in another $25-30 million into the company. ET, however, was unable to ascertain the name of the new investors.
Excluding this round, the company has, thus far, raised an estimated $100 million at a valuation of almost $550 million, according to a report by Entrackr.
Founded by Vikram Chopra and Mehul Agrawal, who had earlier run Rocket Internet-seeded online furniture portal FabFurnish, Gajendra Jangid and Ruchit Agarwal in 2015, Cars24 competes with the likes of Droom Technologies, CarDekho, CarTrade, as well as classifieds such as Naspers-owned OLX and Quikr, in the country’s broader used car market.
However, the company’s business model differs from its peers, by focusing more on the supply side. It allows car owners to sell their vehicles, paying them almost instantly, post the necessary vehicular inspection at its 150-plus branches across the country. It then sells the cars through its proprietary auction platform to businesses dealing in pre-owned vehicles.
In an earlier conversation with ET, Chopra had said that Cars24 was doing 12,000 cars per month. The company, which is currently present in 35 cities across the country, aims to expand that to 100 cities by the end of the current calendar year.
Investors have continue to bet big on the country’s massive, but highly under-penetrated used car market. According to various industry estimates, there are 5 million used cars sold in India annually, compared to 3.5 million new vehicles.
In January, CarDekho, which also counts Sequoia Capital as an investor, said it had raised $110 million from various investors, including, Hillhouse Capital, CapitalG , the growth investment arm of Alphabet and Axis Bank, making it, in the process, the Indian startup ecosystem’s first $100 million-plus equity financing transaction in 2019.