In its largest round of funding till date, India’s largest online marketplace for used automobiles, Cars24 Services, said on Monday it has closed a $450 million round of funding including a $340 million Series F equity round coupled with $110 million debt from multiple financial institutions--moves that have almost doubled its valuation to $1.84 billion.
The Series F equity round was led by DST Global, Falcon Edge and SoftBank Vision Fund 2 along with participation from Tencent and existing investors Moore Strategic Ventures and Exor Seeds.
J Sagar Associates advised Cars24 on its Series F round.
This comes more than a week after VCCircle reported that SoftBank and others would invest in the firm.
Cars24 plans to use the money to expand into the UAE and Australian markets and build its cars, bikes and financing business in India, while continuing to invest in technology.
Vikram Chopra, co-founder and CEO of Cars24 said, “Traditionally, car selling or buying have been a tiresome process, and only 2 of 100 people own cars in India. However, over the last six years, we have been working continuously towards fulfilling the dreams of many Indians to own a car by transforming the customer's journey- 'the CARS24 way' that is hassle-free, safe and transparent. With this investment, we will continue to penetrate into existing car, bikes and financing business in India while venturing into new overseas geographies this year.”
The company has already sold over 1000 cars in the UAE since the launch of its operations in April this year. CARS24 also officially announced its launch with a new campaign last week in Australia.
Rahul Mehta, Managing Partner at DST Global said, “Cars24 is at the forefront of transforming the way consumers buy and sell cars by providing a unique end-to-end digital shopping and transaction experience. They have emerged as the undisputed leader in the used car space in India and early traction in international markets is exceeding expectations. We love backing founders who are bold and ambitious thinkers and couldn’t be more excited to enter the second innings of our long-lasting partnership with CARS24.”
“It is rare to find a business as focused on the consumer experience and as driven to ensure it is outstanding via the use of data science and technology. Finally, we are deeply impressed by the founders’ leadership, and are thrilled to back them as they transform the used car industry in India and scale internationally across MENA and SE Asia”, said Navroz D. Udwadia, Co-founder of Falcon Edge Capital.
The startup, based in Gurgaon on the outskirts of New Delhi, was founded in 2015 by Vikram Chopra, Mehul Agrawal, Ruchit Agarwal and Gajendra Jangid.
According to data intelligence platform VCCEdge, Cars24 had clocked Rs 2,998.14 crore in net sales in fiscal 2019-20 compared with Rs 1,654.61 in the previous financial year. In comparison, rival CarTrade, which got listed on the stock exchanges earlier this month, recorded operational revenues of Rs 298.2 crore during the period.
Cars24 had secured $200 million (Rs 1,480.9 crore) as part of its Series E funding round in November last year. The transaction had catapulted the marketplace for used cars to the famed unicorn club that features startups with a valuation of at least $1 billion. The round was led by DST Global and the capital was raised at a valuation of over $1 billion.
The startup had raised $100 million in a Series D funding round from both existing and new investors in October 2019.
This year, Cars24's rival CarTrade floated its initial public offering (IPO) and listed on the stock exchanges.
Another Cars24 competitor CarDekho got hit by the pandemic, which may have led to the process of closing down over one-third of its offline Gaadi stores across the country.
However, the segment has seen a handful of large institutional cheques being written to some startups over the past one year.
For instance, in July, online automobile marketplace Droom Technology said it is raising $200 million in a pre-IPO funding round at a valuation of $1.2 billion, making it hit unicorn status. Droom added that it plans to float an IPO next year.
In the same month, pre-owned cars platform Spinny raised Rs 771.5 crore in a new funding round led by Tiger Global Management.