Car marketplace Cars24, which recently entered the unicorn club, doubled its revenue in the financial year 2020. The Gurugram-based company recorded consolidated revenue of INR 3,056 Cr in FY2020, compared to INR 1,687 Cr recorded in the previous year.
About 98% of the company’s revenue has come from sale of products, which nearly doubled from INR 1,650 Cr to INR 2,966 Cr in the year. The company’s revenue through sales of services grew by over 5x from INR 4 Cr to INR 22 Cr in FY2020. Besides this, the company also added two more revenue sources in FY2020, namely income from interest and other financial services.
Along with the increased revenue, Cars24 also managed to reduce its net loss margins by 12% from INR 325.6 Cr to INR 284.9 Cr in FY2020. The company’s expenditure also grew by about 1.6x or 66% growth in its expenses. It recorded an expense of INR 3,350 Cr in FY2020. Interestingly, Cars24’s expenses in FY2020 are nearly double the revenue in FY2019.
Stock-In-Trade Makes Up Major Expense For Cars24
Among the company’s expenses, the purchase of stock-in-trade was a made-up significant chuck with 85.5% of the total expenses going into it. The company spent about INR 2,865 Cr in buying these products in FY2020, almost doubling up from INR 1,623 Cr spent in the previous year.
Employee benefit expenses made up for another 6% of the spending with the spending of INR 217.1 Cr in FY2020. The company spent INR 185 Cr in paying up salaries and wages, and INR 20 Cr as an expense on employee stock option scheme and employee stock purchase plan. Staff welfare expense, managerial remuneration, gratuity and contribution to provident and other funds for others added to this expenditure.
Notably, the company reduced its advertising and promotional expenses by 23% in FY2020 to make up only 4.2% of the total expense. This expense made up for 9.2% of the total expense in FY2019. The company spent INR 141.6 Cr in FY2020 on advertising activities and INR 185.4 Cr in FY2019.
Inc42 reached out to Cars24 seeking more details on the company’s financial performance in FY2020, however we did not receive a response till the time of publishing. We will update the article with the company’s responses as soon as we receive them.
A Smooth Ride Into The Unicorn Club
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. A consumer can simply book an appointment with any of the company’s branches, visit the branch and sell a car in a single visit.
The company has raised about $393.8 Mn from marquee investors like KCK, Kingsway Capital, MPGI, Sequoia Capital India, Unbound, Exor Seeds and Global Car Group. It last raised $200 Mn in a Series E funding round led by DST Global, which accelerated the company into the unicorn club.
Over the last five years, the company has expanded its presence through the franchise model. It intends to scale up its presence from 130 cities to over 300 Tier II, III and IV cities and towns by 2021. At present, it has over 10,000 channel partners registered on its platform and plans to increase it to more than 20,000 partners by next year.
As the mobility and transportation segments were facing a downturn during the pandemic, Cars24 claims to have witnessed an uptake. With annual transactions exceeding 2,00,000 units and 4x increase in website engagement, the company claims to have surpassed pre-Covid levels in the third quarter of 2020.