CarDekho Pumps $100 Mn In Fintech Subsidiary Rupyy

Automobile marketplace CarDekho plans to invest $100 Mn in a mix of debt and equity in its fintech subsidiary Rupyy.

The finance arm will use the supposed funding to scale up its non-banking financial company (NBFC) business. The prospective investment will also be deployed to shore up its technology vertical and launch new product categories. 

“…This infusion from our parent company will amplify the processes manifolds. As we continue to expand in different verticals and enter new regional markets, we aim to represent 35 – 40% of the segment’s market share,” said Rupyy chief executive officer and cofounder Namit Jain

This comes six months after CarDekho announced the setting up of its fintech subsidiary, automobile marketplace. 

Commenting on the announcement, CarDekho Group’s chief CEO and cofounder Amit Jain said, “…On the back of best-in-class tech based solutions and learnings, Rupyy has solved all the challenges that a customer faces while applying for a used car loan. Rupyy is already on a strong growth trajectory and with this infusion, it’s ready to disrupt the entire used car finance business of our country and take it to a whole new level.”

Founded in 2007 by Jain and Anurag Jain, CarDekho is an ecommerce platform for new and used cars. The umbrella group also offers a clutch of auto platforms such as Gaadi.com, ZigWheels.com, BikeDekho.com, and PowerDrift.com.

The Delhi NCR-based startup turned unicorn in October last year after raising $200 Mn in a Series E funding round led by Leapfrog Investments.

In April this year, the startup’s financial subsidiary CarDekho Financial Services was merged with Rupyy. Since then, the platform has transformed into a digital lending platform that offers multiple financial products for customers including car, personal and two-wheeler loans. 

In September, Rupee claims to have hit INR 500 Cr in the monthly disbursement volume of car loans. The startup plans to scale its annualised disbursals to INR 10,000 Cr by the end of the current fiscal year.

It claims to have scaled its new car loan category to INR 50 Cr monthly disbursals within months of the launch. Rupyy also plans to focus on EV Financing and claims to be chalking out a plan to set up pan-India tie-ups with OEMs in the space. 

CarDekho reported a consolidated net loss of INR 342.8 Cr in FY21, against revenue of INR 884.3 Cr during the period under review. 

Rupyy largely competes with the lending arm of competitor Cars24, Cars24 Financial Services, as well as with other mainstream players such as Mahindra Finance, Tata Capital, among others. 

Automobile marketplaces have had tough luck at the Indian bourses so far. While its peer CarTrade had a dud of a listing, other competitors such as Droom and Cars24 are weighed down by heavy losses. Droom also wanted to go for an IPO but has since shelved plans amid market volatility, working rather on profitability and unit economics. 

As the market gets tougher for such marketplaces, these startups have also opened fintech subsidiaries to get a pie of the burgeoning car finance market. But, as the market continues to operate in the red and negative investor sentiment prevails, many players are looking to spruce up unit economics to beat the onslaught of the market.