Cars24 closes $50M funding to fuel its expansion plans

Cars24, the online marketplace for buying and selling used cars, has completed an investment raise of about $50 million (Rs 340 crore) to fuel its expansion plans, according to two people familiar with the development.
The capital was raised from Sequoia Capital India and two of Cars24’s existing investors — Cayman Islands-based Kingsway FCI Fund and Toronto-based KCK Global — the persons cited earlier said.
 
The funding round is expected to have valued the Gurugram-based firm at about $250 million, they added. ET could not independently verify the identity of the investors in the round besides Sequoia Capital. Cars24 and Sequoia Capital declined to comment on ET’s queries on the matter. Kingsway FCI Fund and KCK Global could not be reached for comment.
 
Sequoia Capital is an investor in CarDekho, which competes with Cars24.
 
Cars24 follows an asset-heavy customer-to-business (C2B) model, where it buys used cars from individuals and dealers and sells them to other dealerships. Unlike a listings-based classifieds platform, Cars24 enables the end-to-end transaction itself, charging a commission of about 4-5% for each transaction. The firm has sold under 1,00,000 cars since inception in 2015.
 
The three-year-old firm, founded by former FabFurnish founders Vikram Chopra and Mehul Agrawal, clocks 3,500-4,000 transactions per month, with an average price of about Rs 2,00,000-3,00,000 per vehicle sold, according to industry insiders. This would peg Cars24’s monthly gross merchandise value, or total sales, at about Rs 100-120 crore, with commission revenues of about Rs 4-4.8 crore per month.
 
Previously, Cars24 had raised about $50 million from global investors including Russian billionaire Yuri Milner’s Apolletto Asia and Venture Highway, amongst others. Apolletto Asia’s sister fund, DST Global, is one of the investors in Berlin-based firm Auto1, whose business model is similar to that of Cars24. This takes the total capital raised by the firm to about $100 million.
 
Cars24 competes with Sequoia Capital, CapitalG and Hillhouse Capital-backed CarDekho, Temasek-backed CarTrade, Toyota-backed Droom as also Quikr Auto and Olx in the online auto marketplace space.
 
The firm clocked about Rs 417 crore in gross sales in FY17, while losses stood at Rs 76.3 crore, as per financial documents filed with the Registrar of Companies and accessed from business research platform Tofler. Cars24 spent over Rs 497 crore towards operational expenses in the same year. The firm is yet to file its financials for FY18.
 
The auto transaction-led business in India is cash-flow dependent and, hence, Cars24’s operational revenues as listed in the financial documents reflect the total worth of sales made by the firm, i.e. GMV, a proxy for gross sales in the consumer internet world.
 
Several players, including CarDekho and CarTrade, have turned their focus towards the used car business, which is yet to be fully tapped in India and one that remains largely unorganised.
 
While CarDekho clocked Rs 113 crore in revenues in FY17, CarTrade and Carwale parent entity MXC Solutions India saw revenue grow almost 22% to about Rs 52 crore, driven by the used-car business.
 
According to the people cited earlier, Cars24, which has also started a C2C business model on the platform, is also looking to build a suite of allied services around car sales data for dealers and auto financing, which it intends to monetise at scale.
Shoot

Trending News

Xiaomi pumps Rs 3,500 crore into India business

BlackBuck's out to raise $150M in new round, valuation likely to jump to $800 M

With $21 Billion, Azim Premji among world’s top philanthropists

Google agreed on a $45M exit package for India-origin exec accused of sex abuse

HSBC pegs Zomato's valuation at $3.6 billion ahead of Swiggy

PayU in talks to acquire online payments firm Wibmo for $60M

Quikr close to acquiring refurbished goods marketplace Zefo in all-stock deal

What life looks like after a layoff from an IT company

General Atlantic & Tencent pump in another Rs 80 Cr in ed-tech unicorn Byju's

US Senator Warren vows to break up Amazon, Facebook, Google

SoftBank extends tech reach with $5B Latin American fund

Coverfox hits the market to raise $50M in new financing round

Cognizant faces US lawsuit alleging discrimination

China's Huawei sues US over federal ban on using its products

Germany's Delivery Hero acquires Zomato's UAE biz, invests in India ops

Ahead of deadline, debate rages on e-commerce policy

Flipkart rejigs reporting of Myntra-Jabong head Amar Nagaram

Grofers raises fresh funds from existing investors, valuation hits $425M

Sachin Bansal invests Rs 250 Cr each in NBFCs Altico & IndoStar: Report

I-bank Wolet files $800k suit over Flipkart’s Upstream buy

Flipkart FY18 revenue up 50%, but losses grow 5x

Pine Labs in talks to acquire Amazon-backed Qwikcilver for $100M

India can become 2nd largest 5G market in 10 years: Huawei

Alibaba rival Pinduoduo seeks to raise $1.5B

Twitter Q4 revenue grows to $909M as video ad sales surge

Mukesh Ambani to invest $1.4B in West Bengal, will help e-commerce expansion

Etail may lose Rs 40,000 crore, retail to get a 3rd of it

Steadview Capital invests $74M in Ola valuing it at around $6B

Byju’s ups revenue to Rs 490 cr in FY 18, losses drop by half

Agritech startups Sabziwala and LivLush merge their business under new entity Kamatan

Avail Finance lands $17.2M from Matrix Partners & Ola, Freecharge and Flipkart founders

RBI suggests tax sops, self-regulation to build fintech space

Swiggy hires new CEO for its Access Service, gets new CFO

Logistics company Delhivery registers 44% increase in FY17 revenues

WeWork to acquire one of the oldest social networks, Meetup

Qualcomm rejects Broadcom's $103 billion offer

EasyRewardz gets $2 million Series-A funding

'Anemic' iPhone 8 demand drags Apple shares lower

Lending platform Lenden Club gets Rs 3.5cr in Equity Investment

On festive sales, Flipkart says 65% clients from Tier-II cities