Gurugram-based online used car marketplace Cars24 is in talks to raise $350 Mn from DST Global, Masayoshi Son’s SoftBank, and Falcon Edge Capital, among others. The said investment will value Cars24 around $2 Bn. The startup is likely to close the deal within a couple of weeks.
According to a Bloomberg report, the automobile marketplace startup is also gearing up for an initial public offering in next 18 to 24 months, thus joining a slew of Indian tech startups waiting to taste their fate in the public market. If Cars24 files its draft red herring prospectus (DRHP), it would become the second car classified platform waiting to go public after CarTrade. Earlier this month, CarTrade went public to raise INR 2,000 Cr through public. The company’s issue included an offer for sale (OFS) for 1,23,54,811 equity shares of the company.
Founded in 2015 by Vikram Chopra, Gajendra Jangid, Ruchit Agarwal and Mehul Agrawal, Cars24 offers a platform for car owners to sell their used cars at the best price. A consumer can simply book an appointment with any of the Cars24 branches, visit the branch and sell a car in a single visit. The platform also offers to purchase a pre-used car from the site. Cars24 has also forayed into selling used two-wheelers. In this segment, the company competes against CredR, OLX, Quikr, among others.
Earlier last year, the startup entered into the unicorn club after raising $200 Mn in a Series E round led by DST Global. The startup has raised $100 Mn in Series D round led by London-based investment firm Unbound and Toranto’s KCK Global. The startup in the segment locks its horns with CarTrade, Droom, Spinny, among others. Last month, Droom entered the unicorn club after raising $200 Mn in its IPO growth round, pushing the valuation to $1.2 Bn. The startup plans to go public on Nasdaq or BSE in 2022.
As per an outlook report by Mahindra First Choice Wheels, India’s used car market is estimated to reach between 6.7 Mn units and 7.2 Mn units per year by 2022. The organised channel market share for pre-owned cars grew from 10% to 18% between FY 11 and FY 19