SUMMARY
After months of deliberation, we have made the difficult decision to not pursue operations in Indonesia and Saudi Arabia, said Global CEO
Cars24 shut its operations in Indonesia on May 3, which impacted nearly 100 employees in the country
This comes a year after the startup fired 600 employees across verticals and saw the exodus of top-level leadership at the company
Used cars marketplace Cars24 has wound up operations in Indonesia and Saudi Arabia, as it looks to focus on core markets such as India and Australia.
“We realised we need a deeper focus, and hence, after months of deliberation, we have made the difficult decision to not pursue operations in Indonesia and Saudi Arabia at the moment. We will be prioritising our focus on our core markets — India, Australia, Thailand and UAE and continue driving growth,” said Cars24 cofounder and global CEO Vikram Chopra.
As per Tech in Asia, the startup shut its operations in Indonesia earlier this week, which impacted nearly 100 employees in the country. The company’s closure in Indonesia comes within a year after it forayed into the Southeast Asian nation.
Founded in 2015 by Chopra, Gajendra Jangid, Ruchit Agarwal and Mehul Agrawal, Cars24 is an automobile marketplace that allows customers to sell their used cars
The startup last raised a funding of $450 Mn in a round led by DST Global, Falcon Edge and SoftBank Vision Fund in September 2021. To date, the automobile unicorn has bagged close to $1.3 Bn in funding from multiple investors, including the likes of Alibaba, Tencent, Moore Strategic Ventures, and Exor Seeds, among others.
Cars24 competes with the likes of Spinny, Droom, CarTrade, Droom, and OLX, among others in the highly competitive Indian used cars market.
A Choppy 2022 For Cars24
The startup has been cornered on multiple fronts. Even as profitability and sustainable growth seem to be the mantra these days, the FY22 results presented a bleak picture of the company’s finances.
Cars24’s losses zoomed 29.5% YoY to INR 248 Cr in FY22, up from INR 191.5 Cr in FY21. However, the company also more than doubled its total income to INR 6,008.2 Cr in the financial year that ended March 2022, compared to INR 2,775.9 Cr in FY21.
The move to pull out of Indonesia and Saudi Arabia comes nearly a year after the startup sacked 600 employees in May 2022. Back then, the sources had told Inc42 that the layoffs were part of Cars24’s bid to slash costs and automate operations.
Back then, reports surfaced that the startup halted its aggressive expansion plans in the UAE, the Middle East, Thailand, and Australia. The startup was also looking at slashing its burn rate by half to $10 Mn monthly to extend its runway.
Since July last year, the company has also witnessed multiple high-level exits, including the exodus of vice-president and business head of Cars24, Kingshuk Sanyal, chief human resources officer Mrinal Sinha and global CTO Jitendra Agrawal.
Despite the funding winter gripping the entire Indian startup ecosystem, the Indian auto marketplace is witnessing massive growth largely on the back of online players streamlining the largely unorganised used car market. Most of the cars are sold via mechanics and vendors offline and it is this market that players like Cars24 want to tap into.
Coupled with factors such as transparency in buying vehicles online and an increase in demand for car mobility, the used car space is witnessing an uptick in the country. As per a report, the homegrown used car market was pegged at around $32.14 Bn in 2018 and is projected to soar to $74.70 Bn by 2027.
