Cars24 in India, a used vehicle sales platform, raises $ 450 million for a valuation of $ 1.84 billion – TechCrunch


The used car market is now benefiting from another major infusion of venture capital, with one of India’s fastest growing startups securing a major funding round to double its growth: Cars24 – a site and an app that sells cars to users and has used two of them. -wheel motorcycles – raised $ 450 million, a Series F of $ 340 million and $ 110 million in debt. The investment values ​​Cars24 at $ 1.84 billion after the investment, the company said, making it one of the most valuable private used car startups in the world.

DST Global, Falcon Edge and SoftBank Vision Fund 2 co-led Series F, with participation from Tencent and existing investors Moore Strategic Ventures and Exor Seeds. The turn to debt came from a mix of financial institutions. This fundraiser, now confirmed and official, has been the subject of rumors in recent weeks, albeit at a smaller amount: it did not include the debt portion, and some reports were based on regulatory filings for an amount lower than the sum finally collected.

Vikram Chopra, the CEO who co-founded the company in Gurugram with Mehul Agrawal, Ruchit Agarwal and Gajendra Jangid, said the plan will be to use the funds in various areas.

They include national and international expansion (it is already present in India, Australia and the United Arab Emirates, and is targeting more markets); technology (particularly areas such as expanding its virtual valuation process, as well as greater data science around pricing and other details related to sales and after-sales service); and financing both to purchase vehicles and to help consumers make vehicle purchasing a viable economic option.

Cars24 is active in over 200 cities in India and has sold 400,000 vehicles (cars and motorcycles) to date with over 13 million monthly visitors to its site. All of this gives it the claim to be the biggest platform of its kind in India. But its ambition is to improve the inefficiencies of selling a car, or buying a used car, in many parts of the world, not just in its domestic market.

“Buying or selling a car is difficult all over the world,” Chopra said in an interview. “It’s just a broken experiment all over, so we’re trying to fix this.”

This is also where finance and technology are important. When Cars24 debuted in 2015 in India, Chopra said, it faced the added problem (or opportunity?) Of 50 to 80 cars per 100 people in Europe.

“But buying a used car in India is a way for a person to own all car, ”Chopra said. In a country like India, “we want to increase the penetration to 10 or 15”. He added that the car resale market in India today is around $ 25 billion, but is on track to soon reach $ 100 billion.

Cars24 is built around a “buy, repair then resale” model similar to that of the real estate juggernaut Opendoor: it promotes the vehicles of individuals wishing to resell them; redeems them if an agreed price can be reached; repackages them; then resells them and delivers them to new owners. This model, Chopra said, gives Cars24 an edge over some of the shortcomings that exist with traditional players (both online and offline).

First, it provides a centralized platform, and its corresponding app, where users can browse one-stop inventory that goes beyond their local areas (and local dealerships). This inventory is organized and made discoverable using a number of algorithms, and the price is also determined by Cars24’s technology.

“Cars24 is building a data-driven technology platform that organizes the fragmented used car market in India,” Munish Varma, managing partner of SoftBank Investment Advisers, said in a statement. “We have closely followed his approach and his efforts which disrupted used car retailing in India.”

“We believe Cars24 is improving the customer experience in the used car industry with a focus on technology,” said Sumer Juneja, partner of SoftBank Investment Advisers, in a statement. “We will continue to support this growth given our expertise in e-commerce activities in all markets.”

Second, when consumers make a purchase, they can keep and test drive a vehicle for up to seven days “and return it if you don’t like it”.

This, Chopra continued, contrasts with other used car sales sites, as well as physical dealers: either they do not offer trial runs, or (in the case of physical dealers or individual sellers outside line), they can give a driver 10 or 15 minutes maximum, with someone assisting you while you drive the vehicle: not a great way to find out what you like or don’t like about a vehicle.

It is also a model that investors believe will give Cars24 an edge over its competitors.

“We have studied used car platforms around the world and are struck by the similarities we see between Cars24 and similar companies that have grown successfully,” said Navroz D. Udwadia, co-founder of Falcon Edge Capital, in a statement. “Cars24 has strengthened its pioneering advantage by creating wide supply side moats, which in turn boost demand liquidity on the platform. By positioning itself as a buying and selling solution for consumers, Cars24 generates a huge recall at the top of the list. It’s rare to find a company so focused on the consumer experience and determined to make sure it is exceptional through the use of data science and technology. Finally, we are deeply impressed with the leadership of the founders and are delighted to support them as they transform the used car industry in India and expand internationally in MENA and South Asia. -East.

A used vehicle sales platform that raises a huge amount of money is somewhat ironic considering some of the biggest trends in the transportation world.

Some have speculated that a wave of factors – they include the rise of ubiquitous email applications like Uber; on-demand carsharing services like Getaround or Zipcar; a push in urban centers encouraging people to use a wider range of transportation options to compensate for traffic; and larger environmental trends that lead some to avoid gas guzzlers – would push the world a way of owning a car. Yet in essence, Cars24 (and others like it) are extending the lifespan of many older models to keep more vehicles in circulation and out of hands.

But using Uber can be expensive and is not the same as having your own wheels, and the desire to have your own vehicle may be at a peak right now due to Covid-19 and the people concerned about the spread or capture of the virus, Chopra mentioned.

“This is certainly not the case in India where fewer people want to own a car,” he said. “During the pandemic, we saw a lot of demand, in India in particular. Regarding new, greener vehicle technologies, this is also interesting and will simply showcase another class of vehicles on Cars24 as the adoption of electric vehicles increases, he added. But all is not quite there yet.

Part of the reason why it seems like we’ve found ourselves crowded with startups and scale-ups hoping to define the next generation of used car sales platforms is the strength of the current opportunity.

Others in the same space who have recently raised funds include close competitors like Spinny, also in India; Cazoo in the UK, which has now gone public; InstaCarro outside of Brazil; Kavak from Mexico; and Carsome from Malaysia, among many others. Carvana, one of the largest used car platforms, is also publicly traded and is now valued at nearly $ 28 billion.

What is interesting is that each of these big players has so far carved out very solid markets in their home country, and it is only more recently that they are moving towards expansion. international. Cars24 has attracted hundreds of millions of dollars in funding (it also raised $ 200 million less than a year ago) in part because its investors think it has what it takes to export, and therefore to evolve its model beyond the huge Indian market.

“Cars24 is at the forefront of transforming the way consumers buy and sell cars by delivering a unique end-to-end digital buying and transaction experience,” said Rahul Mehta, Managing Partner at DST Global, in a press release. “They have become the clear leader in the used car industry in India and the early traction in international markets is exceeding expectations. We love to support founders who are bold and ambitious thinkers and who couldn’t be more excited to enter the second round of our long-standing partnership with Cars24.

Updated to change, at the request of Cars24, its description as “Marketplace” and the number of active cities from 130 to 200.


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