Auto portal CarDekho has raised $110 Mn in Series C funding from existing investors Sequoia India, Hillhouse Capital, CapitalG (Alphabet growth investment arm), and Axis Bank.
CarDekho is an online platform that enables its users to research and compare car specs and prices, helps with financing and insurance and other aspects of car buying and selling; it also enables sale and purchase of used cars.
Amit Jain, cofounder and CEO, CarDekho told Inc42 that the company will primarily use the fresh funds to strengthen its insurance, finance, and used car verticals. The RainMaker Group acted as the sole financial advisor to CarDekho for the transaction.
So far, CarDekho, owned by Girnar Software, has raised $202 Mn, including the latest funding round. Prior to this round, the company raised $75 Mn from investors such as Hillhouse Capital, Tybourne Capital, Times Internet, and Sequoia Capital, among others.
“Since Sequoia India’s initial investment, Cardekho has been executing well, and has many existing business lines contributing to their growth,” said Shailesh Lakhani, managing director, Sequoia Capital India Advisors.
CarDekho: Building An Online Auto Ecosystem
CarDekho aims to construct a complete ecosystem to enable its consumers to have easy and complete access to buying and selling cars. It also wants to manage and improve the entire ownership experience, by facilitating the purchase of accessories, tyres, batteries, and insurance, and providing roadside assistance.
David Rhee, partner at Hillhouse Capital, said, “We look forward to continuing to work with CarDekho’s management team as they leverage their deep knowledge of the sector to better serve India’s growing automotive market.”
The startup works actively with 5,000 dealerships across India and claims to facilitate the sale of more than 12K cars and 25K two-wheelers per month. In addition, it works in collaboration with more than 10 financial institutions across the country to facilitate used car financing and provide a seamless experience for both buyers and sellers.
The company claims to record more than 73 Mn in monthly traffic, 39 Mn monthly unique visitors, 1.9 Mn YouTube subscribers, and more than 5 Mn mobile app downloads.
“We have been impressed with Amit and the CarDekho team’s ability to maintain market leadership in the auto space and run a capital efficient business,” said Kaushik Anand, head of India investments at CapitalG.
In FY18, the company reported a 40% increase in its revenue, reaching $21.6 Mn (INR 160 Cr) as compared to $15.6 Mn (INR 116 Cr) in FY17. The company also claimed to have reached breakeven at an EBITDA level as of September 2018. The growth came on the heels of its insurance and finance businesses launched over the last two years.
Here are some of the important business moves made by CarDekho in the last few years:
- In August 2016, CarDekho started offering digital loans to used car dealers.
- In May 2017, the company procured an Insurance Regulatory and Development Authority (IRDA) licence to launch its auto insurance vertical under Girnar Insurance Brokers Pvt Ltd.
- In August 2018, CarDekho acquired Indian Automotive Youtube channel PowerDrift Studios Pvt Ltd to come up with “best-in-class” video content as a decision-enabler for its stakeholders.
- Prior to this, it acquired companies in the automobile segment including Help on Wheels, Volob Technologies, among others.
- CarDekho has also expanded its operations internationally under the brand names of CarBay and OTO, covering countries such as Malaysia, Philippines, and Indonesia.
The State Of The Auto Industry In India
The Indian automotive industry is expected to reach $251.4-282.8 Bn by 2026 and the country is expected to emerge as the world’s third-largest passenger vehicle market by 2021. The industry attracted foreign direct investment (FDI) worth $19.29 Bn during the period April 2000 to June 2018, according to data released by the Department of Industrial Policy and Promotion (DIPP).
CarDekho competes with the likes of Droom, Cartisan, Bumper PitStop, etc. Droom raised $60 Mn in 2018 itself in Series D and E rounds.
One of the major players in the segment is OLX, an online classifieds marketplace for auto, real estate, and goods and services, registered a 50% growth in the number of buyers in the pre-owned cars category in 2017.
Even as CarDekho readies to leverage the new funding for its next phase of growth, it has its future route map chalked out. S Amit Jain told Inc42 that the company aims to play an important role in the electric vehicle (EV) revolution brewing in the country. He believes that India is at the crux of technology upgrade and EVs are bound to make inroads here by 2021-22. Therefore, CarDekho is looking to leverage its marketplace to be one of the enablers of the EV revolution.
Well, it has certainly made a big bang start to 2019 with its latest funding and seems to be heading in the right direction.