Gurugram-based online used car marketplace Cars24 has raised $100 Mn (INR 714 Cr) in Series D equity funding round. The investment has come in from a batch of new and existing investors. The round was led by London-based investment firm Unbound and Toronto-based KCK Global, bringing in $25 Mn each.
Other investors included New York-based investment firm Moore Strategic Ventures, Sequoia Capital, DST Global, Partners Fund and the Agnelli Family. The fresh financing will be used to strengthen the footprint of the company in new cities, franchise model, technology and recently announced consumer lending (NBFC) business.
Prior to this round, the company has raised $100 Mn across rounds and was last valued at $550 Mn. The company is looking to expand into 75 cities by the end of the year and 200 cities by 2020.
Founded in 2015 by Vikram Chopra, Gajendra Jangid, Ruchit Agarwal and Mehul Agrawal, Cars24 claims to create an efficient and reliable way for car owners to sell their used cars at the best price.
All one has to do is book an appointment with any of the Cars24 branches, visit the branch and sell a car in a single visit. The company has expanded its presence via franchise model and intends to scale up its presence in over 300 Tier 2, 3 and 4 cities and towns by 2021. At present, the company claims to have over 10,000 channel partners registered on its platform and intends to increase the network to more than 20,000 partners over the next 2 years.
“With this investment, we have not only strengthened our vision to become India’s largest pre-owned automobile company but have also given one more reason to our customers to have faith in us. To make it a reality, we’ve been investing heavily in making our tech more robust, as well as convenient and friction less for all,” said Vikram Chopra, cofounder and CEO.
Cars24 currently claims to do about 13,500 transactions monthly, with an average order value of INR 3.5 lakh. Cars24 claims to be doing a transaction of 1.5 Lakh cars per year and targeting 1 Mn annual transactions by the end of 2021. The investment comes soon after reports surfaced that Cars24 has shut down about a dozen outlets in Delhi. It had reportedly received nearly six legal notices from landlords in Delhi for non-payment of rent for months.
Recently, Cars24 also received an NBFC license from the Reserve Bank of India (RBI) for its new entity — CARS24 Financial Services. With Cars24 Financial Services, the company will facilitate vehicle loans to customers as well as finance channel partners to help them expand their businesses. The customers will be eligible for a credit based on the car value they are buying. For consumers, the average ticket size of a loan would be INR 2.5 Lakh- INR 3 Lakh.
Unbound’s founder, Shravin Bharti Mittal said, “We believe Cars24 is disrupting the pre-owned car industry in India and addressing the challenges faced by car owners by providing them with a world class customer experience which is quick, easy and hassle-free.”
Other major online used car marketplaces in India are CarDekho, Droom, Quikr, Olx, Mahindra First Choice Wheels, among others. According to an IBEF report, the Indian auto industry, one of the largest in the world, accounts for 7.1% of the country’s GDP.
The report has pegged the Indian automobile market at $125 Bn. Out of this, $100 Bn is the estimated share of automobile sales and the remaining $25 Bn includes services. It is expected to grow at a rate of about 10% to a whopping $225 Bn by 2020.
However, recently, the sector has been facing major slowdown and has been seeking incentives from the government to stay on track for growth.