Girnar Software Pvt. Ltd, which runs automobile marketplace CarDekho, narrowed its loss to Rs 246.5 crore in the financial year 2022, down 28.1% from Rs 342.9 crore loss in the fiscal before, thanks to a sharp rise in its operational revenue.
The Jaipur-headquartered company’s operating income grew 80.7% to Rs 1597.5 crore from Rs 884.3 crore in FY21. The growth in revenue, however, comes at the cost of a rise in expenses, which surged to Rs 2,170 crore in FY22 from Rs 1277.6 crore in the year-ago period.
CarDekho is eyeing to achieve break even by FY24. “CarDekho expects to post Ebitda (earnings before interest, taxes, depreciation, and amortization)-level profitability by the third quarter of FY24. By then, “we are hoping for green shoots at a group level,” cofounder and chief executive Amit Jain told VCCircle last month in an interview.
In FY22, the company’s employee benefits expense grew 32% to Rs 573.2 crore, compared to Rs 434.7 crore in FY21. The majority was spent on salaries and wages. It also spent Rs 408.2 crore in advertising and promotions in FY22, about 2.3x of Rs 177.6 crore in FY21.
Founded in 2008 by siblings Amit Jain and Anurag Jain, CarDekho started as a car discovery platform for both new and old four-wheelers. It ventured into the pre-owned car retail market under the ‘Gaadi’ brand name in 2019, and more recently launched its lending vertical Rupyy.
However, the company has scaled down its asset-heavy used car marketplace to pursue an auction model. It closed many retail stores in India since last year due to thin margins in the used marketplace business.
“Globally, most of the used car marketplace models have collapsed. We also evaluated our own models on where it’s going to generate a profit pool. So, we’re now pursuing auction business where we buy cars from customers and auction them to the dealers,” Jain had said.
The Sequoia-backed company also operates several automobile discovery platforms such as BikeDekho, Zigwheels, Gaadi, and Oto as well as university discovery platform CollegeDekho and price comparison portal PriceDekho. Besides India, it has a presence in Singapore, Indonesia, Malaysia and the Philippines.
CarDekho is expecting an annual revenue rate of up to $26 million from Southeast Asia. “That market size is large because the average car value is higher, and the loan attachment rate is higher. This makes it a lucrative market,” Amit had said.
CarDekho Group claims to have over 50 million visitors, more than 5,000 used-car loan agent partners, over 50,000 insurance partners in across 1,300 cities, and more than 3,500 used-car dealers as of March 2022. It also claims to have a war chest of over Rs 1,000 crore net cash.
"On the public listing front, the company is aligning its activities across three workstreams – maintaining highest corporate governance standards, focusing on sustainability and charting out clear path to profitability with long-term value creation for all our stakeholders," said Mayank Gupta, group chief financial officer, CarDekho Group.
The company last raised $250 million as part of its latest Series E round at a valuation of about $1.2 billion in October 2021. The round turned the company into a unicorn. The startup counts LeapFrog Investments, Mirae Asset Group, HDFC Bank, Hillhouse Capital, CapitalG and Ping An Global Voyager Fund as its investors.
