“An investment portal. A celeb tweet aggregator. An e-jewellery store. An astrology website. All failed ideas. All coming from the same company that launched CarDekho.com – first mover in the online automobile portal sector. It was YCombinator’s Paul Graham who famously said that nine out of ten startups are bound to fail. And the key is to be the tenth startup that doesn’t.
GirnarSoft, the parent company of CarDekho and PriceDekho among others, whose valuation has gone up eight times in the last four years to stand at $380 Mn, is proof that Graham has it right. From among the plethora of failed no-go ideas emerged the one diamond that shone.
The breakthrough for us came in 2008 when we were visiting the Auto Expo in Delhi,” says Anurag Jain, COO and co-founder of GirnarSoft while in conversation with Inc42. “We brought back a huge pile of brochures for different vehicles and began comparing specifications and features to identify the best option for us. The experience gave rise to the idea of CarDekho.com, our flagship portal, and first major success,” he adds.
Learning From Failure
CarDekho was not the first idea that the Jain brothers came up with. IIT grads from Delhi – Amit Jain and Anurag Jain were creating software and building portals for a while before hitting paydirt with the online car aggregator. They’d tried their hand at a number of things under the GirnarSoft brand, started in 2007, but nothing was working. “Some (ideas) panned out, most didn’t,” says Anurag, of the early years. But they refused to give up and sweated it out in the face of so many setbacks.
“Each and every entrepreneur, no matter how big or small faces failure at some point or the other during their entrepreneurial journey. It can be a business idea that fails to find traction, or it could be a business that failed to adapt to the changing market environment. Every failure teaches something new and allows us to glean critical insights about what not to do while running a business,” says Anurag. “What matters at such times is picking oneself up after every failure and refusing to give up. This stubbornness and determination to succeed is what, I feel, sets true entrepreneurs apart from also-rans.”
And that is exactly what they did. First came identifying the pain point, the AHA! Moment: Everyone at that fateful automobile exhibition in Delhi was checking out different cars and comparing specs. This meant that there was a need for transforming the online consumer experience in the auto-search space.
From there, a unique idea was born and with a refined business approach arising from the failed ventures along with a ‘how-not-to-fail’ attitude, CarDekho took its first nascent steps in 2008 toward becoming the mover and shaker it is today.
Numbers Game
The way Anurag tells it, CarDekho was poised to be successful from the get-go. “GirnarSoft was built as a company that thinks for its consumers and believes in innovation,” he says. “The fact is that we are aiming to establish ourselves as a multi-billion dollar company with a global footprint by 2021,” he adds. With the founder claiming 50% Y-o-Y returns for the last two years, this certainly doesn’t seem like a farfetched notion.
But let us go right back to the beginning before moving forward.
When the startup first launched, there was no one to fight for market share in the online car aggregator space. Not the case in today’s scenario where CarTrade, its biggest competitor, Droom, Zoomcar, and CarNation among many others are fighting it out to acquire customers and retain them.
After a scrappy few years, the company exploded onto the auto portal space and grabbed investors’ attention in 2013. Sequoia Capital was the first to recognise CarDekho’s potential and invested $15 Mn in an initial round. The company had already grown to 200 employees by then and was in the process of engaging in a multimedia marketing campaign. “On the back of our impressive performance and innovative go-to-market strategy, CarDekho secured funding from Sequoia Capital in 2013,” says Anurag.
With the success of the campaign, CarDekho became a household name and started gaining some serious traction. With the influx of funds, CarDekho bought out rival Ibibo Group-owned Gaadi.com for an alleged $11 Mn.
The Year 2015
2015 was a particularly good year for CarDekho.
Due to its impressive performance, a number of investors including Hillhouse Capital and Tybourne Capital and existing investor Sequoia put up another $50 Mn and raised its valuation to $300 Mn in five years. This sweet deal was followed the very next week by Ratan Tata, the doyen of Indian angel investors also plugging in an undisclosed amount in the company. At this time, the company claimed to have hit 10 million unique visitors.
And this investment was followed by HDFC Bank too picking up a 1% stake in the company in May the same year. Times Internet also showed faith in the company by pledging an undisclosed amount.
Talking about that particular investment, Sanjay Gajwani, CEO of Times Internet said, “We see tremendous growth and value creation opportunities in the online auto industry in India and overseas. GirnarSoft, as the leader in this space, is best positioned to take advantage of this opportunity.”
What Happened Next
Flush with Series B money, the startup went on an acquisition spree while rolling out new products.
The first major development was the acquisition of Times Internet-backed Zigwheels, while its chief rival CarTrade bought Carwale in an all-cash deal. With the company declaring revenue of almost INR 49 Cr for FY 2014-15, it was but natural that the startup would gain investor interest from one of the biggest tech players of all: Google.
In March 2016, Google Capital and Hillhouse invested an undisclosed amount in GirnarSoft and enabled the company to expand business interests outside of India, namely the Middle East and Asia. More specifically, CarDekho launched CarBay a car-comparison portal for the emerging markets of Malaysia, Vietnam, Thailand and the Phillippines.
But everything was not rosy with the rising giant. As with most companies that experience enormous expansion in a relatively short period of time, GirnarSoft too underwent a period of “trimming.” In April 2016, it whittled down 1,2000 employees by 60, officially in a carefully structured plan that was designed to increase “focus on core business, internally realign management and resources…for the best bets for success,” according to CEO and co-founder, Amit Jain.
Nevertheless, when asked about current team strength, Anurag says, “We are about a 3,500-strong team.” A move that was already spelled out back when the layoffs were reported.
Home Is Where The Heart…And Talent Is
The company began its life in Jaipur, and the Pink City still continues to have its charm for the Jain brothers. According to Anurag, “Travel time to work is a breeze! Most people here don’t commute more than 10-15 minutes. There’s peace of mind; life is stress-free. People are good, there’re closeness and depth in relationships, which helps you bond.”
It also helps that the Tier II city has significantly lower operational costs as compared to the metros. Plus, it offers a good talent pool, better quality of life, and proximity to the Delhi NCR. Operational costs here could well be half or a third of those in major metros due to lower rentals, lower cost of living and low attrition. “Jaipur is also home to many engineering colleges, which ensure a steady flow of talent,” adds Anurag.
And it is this attitude of marrying a small town company with big ideas that has heralded the almost eight times growth over the last five years for the software development company.
Expand, Diversify, Execute Solutions To Pain Points
GirnarSoft has a flagship product in CarDekho. And it has been steadily gobbling up portions of market share owned by the minnows in the field, namely Zigwheels and Gaadi.com in a move to consolidate. But the next step in expanding a growing business is to diversify and that is exactly what the company has done.
With platform-supporting portals like TrucksDekho, TyreDekho, BatteryDekho meant to engage and inform consumers about the automobile sector, GirnarSoft has taken steps in the right direction. The company also brought in Help On Wheels, a roadside assistance company, to give its users an end-to-end automobile experience. It followed up these launches with releasing CarBay in a predominantly emerging Asian market, ready to take on iCarAsia, the biggest player in Thailand and Malaysia. Vietnam, as such, has no clear winner in the online auto portal space.
“According to a study by Nomura, India’s auto market is expected to grow 15.6% this year, nearly five times faster than the global growth rate,” says Anurag. “Providing precise information to ease car buying and reducing the time taken for decision making is a challenge. Another big challenge is in scaling up the adoption of digital technologies by auto dealers and OEMs,” he adds. And it is for this exact reason that the company is not looking to rest on its laurels.
The Future Is All About AR/VR
What Anurag is most excited about is using AR/VR (Augmented Reality/Virtual Reality) to give customers an enhanced, next-generation user experience. “Visual experience is a critical element in assessing a car or bike, especially when making a purchase decision,” he says.
For this purpose, the company has spent significant time, energy and money in acquiring and acqui-hiring talent in the form of Connecto, Volob, Drishya360 and BuyingIQ in quick succession. All of which are aimed at improving user connectivity and interfacing across the company’s various offerings with AR/VR technology leading the way.
In Anurag’s own words, “Volob utilises 3D visualisation tools and engineering practices to create a highly accurate virtual representation of cars in real-time. The acquisition will help us in amplifying the overall experience of car buyers on our platform by delivering a highly immersive vehicle discovery on a digital platform. This will also take the consumer experience to a whole new level.
“With Connecto we will improve user experience across all the sites of the company. The team is decoding ways to create delight points for our customers and consumers equally.”
This development has already been rolled out in part with CarDekho’s ‘Feel The Car’ feature. “‘Feel the Car’ provides the customers with a 360-degree holistic interior and exterior view of the car at the touch of a button. Not only does it reproduce highly accurate car sounds such as ignition, engine revving, and horn, but also delivers in-depth insights of various parts of the vehicle through hotspots which can be clicked for additional information,” Anurag says. It is meant to close the asymmetric information gap between users and their car-buying choices.
CarDekho is also in no hurry to raise fresh funding, after the $98 Mn it has raised over the last four years, and wants to focus on strengthening product and scaling up market share while waiting to declare an IPO in the coming years.
Editor’s Note
As already pointed out by Anurag, the potential for growth in the online auto space is huge in India. With smartphone penetration, faster connectivity and generally growing dependence on tech, platforms like CarDekho are soon poised to take over the physical world of car showrooms, garages and the many affiliate services included in the automobile industry. With their strong commitment to providing feature-rich VR experiences for users, CarDekho is displaying considerable foresight and understanding of tech that has so far allowed it to be one of two major players in the online auto portal space.
With other aggregators like Zoomcar, Droom, and its arch rival CarTrade also making significant inroads in the market, plus the onset of existing platforms like Quikr emerging in the secondhand, online car-buying space CarDekho and GirnarSoft should have their hands full keeping one step ahead of the competition.
But will it be able to compete on a global scale with iCarAsia in Asia’s emerging markets and penetrate MENA and South America to profitable gain? That remains to be seen.
