CarTrade Unveils Venture Arm, Eyes INR 750 Cr Investment To Fuel Acquisitions

Auto marketplace CarTrade Tech has announced the launch of CarTrade Ventures to scale investments and acquisitions in the Indian automotive space. 

As part of the move, the new venture will deploy up to INR 750 Cr over the next 5-7 years to strengthen its play in the auto-tech industry. As per the company, the capital was raised through profits generated over the years and funds available with the startup. 

As per the automobile marketplace, the move will enable the startup to acquire and invest in companies that offer differentiated services and technology in the automotive space. Besides, the investments will also help the auto marketplace enter new markets (or segments), and deploy new technologies for existing customers.

The startup claims to be actively scouting to invest in companies across auto sub-segments, including auto finance, leasing, insurance, servicing, car ownership, electric vehicles and clean energy. The Group has also been looking to acquire or invest in new-age tech startups in domains such as augmented reality (AR), artificial intelligence (AI) and visualisation to digitise the auto buying journey. 

While the investments will help the company scale its portfolio, the onboarded companies will also leverage CarTrade Tech’s resource base and customers to scale their offerings.

“In addition to capital, CarTrade Ventures will bring unique value to the companies through synergies with group companies and access to customers and technology, thereby helping these companies scale rapidly,” added a company statement. 

Speaking on the announcement, CarTrade Tech Group’s founder and chairman Vinay Sanghi said, “… We are looking to deploy up to INR 750 Cr for acquiring and investing in companies that are driving innovation in the global auto ecosystem, so that we can offer the consumer a great online auto shopping and ownership experience. We have been very successful in growing our business organically and inorganically and are very excited about partnering with entrepreneurs who share the same vision and passion.”

Curiously, the startup had unveiled similar plans to deploy up to $100 Mn to invest in companies in the auto space back in December 2021 as well. Inc42 has reached out to CarTrade for clarification on whether this is the same fund or whether a new venture has been specifically set up to accommodate the old $100 Mn fund. This story will be updated with their response.

So far, CarTrade has acquired three companies and has made a strategic investment in one startup. While it acquired auto classifieds platform CarWale and two-wheeler marketplace BikeWale for nearly INR 600 Cr back in 2015, it also picked up a 51% stake in Shriram Automall for an undisclosed amount in 2018 and followed it up with the acquisition of vehicle inspection and valuation platform Adroit for an all-cash deal in 2017.

Founded in 2009 by ex-Mahindra First Choice CEO Vinay Sanghi and former eBay India head Rajan Mehra, CarTrade is an Indian multi-channel auto marketplace that allows users to buy or sell new and used vehicles.

Since then, CarTrade Tech has risen to be a publicly traded company and one of the few profitable auto marketplaces in the country. The new-age tech company logged a consolidated profit after tax (PAT) of INR 14.04 Cr in the quarter that ended December 2022, against a total income of INR 115.85 Crin the same quarter.

The startup claims to have a presence at more than 200 physical locations and received 35 Mn average monthly unique visitors in the third quarter (Q3) of the financial year 2022-23 (FY23).

The startup’s shares closed 1.95% lower at INR 522.75 on the BSE on Thursday (February 23).