Used-car portal Cars24 raises $50 mn from Sequoia, others

Used-car portal Cars24 raises $50 mn from Sequoia, others
Photo Credit: Reuters

Gurugram-based online portal Cars24, which buys automobiles from individuals and sells them to businesses, has raised $50 million (Rs 343 crore) from Silicon Valley venture capital giant Sequoia Capital and existing investors, The Economic Times (ET) said, citing two persons. The existing investors are Cayman Islands-based Kingsway FCI Fund and Toronto-based KCK Global.

After the funding round, the company is valued at $250 million (Rs 1,714 crore), the persons added. TechCircle could not verify this.

Last month, online publication Entrackr reported, citing regulatory filings of Cars24’s Singapore-based parent Global Car Pte. Pvt. Ltd, that the company had raised around $50 million from 16 investors since its inception. 

These investors included Apoletto Asia, Venture Highway, Kingsway and KCK Global. The company is also backed by 500 Startups III, Asia Venture Group Ltd, Cyprus-based Vendebita Trading Ltd, Philipp Freise (KKR Private Equity) and Mauritius-based Regent Street Partners, the report added.

It was not immediately clear whether this $50 million reported by ET is the same amount mentioned in the Entrackr report or a new round. The Entrackr report, however, made no mention of Sequoia, which participated in the round reported by ET.

E-mail queries to Mehul Agrawal and Vikram Chopra, co-founders of the venture, did not get a response till the time of filing this report.

A glance at the company’s Registrar of Companies (RoC) filings showed that it had received funds close to $40 million (around Rs 274 crore) until January last year, from its Singapore-based parent. The Indian arm is operated by Cars24 Services Private Limited.

The venture was incorporated in August 2015 by FabFurnish co-founders Agrawal and Chopra. In 2016, Future Group acquired the Rocket Internet-backed online furniture and home furnishings store FabFurnish.com in an all-cash deal At that time, the deal marked Kishore Biyani-led retail conglomerate’s first acquisition in India’s growing e-commerce sector.

Cars 24, unlike most others, operates on an asset-heavy model. The company buys the cars from individuals, and sells them to dealerships and used-vehicle platforms. People looking to sell their car can get their vehicle evaluated online and then visit the nearest Cars24 branch. On completion of physical verification, the company instantly transfers the sum into the bank account of the seller, going by the information available on its website.

The company, which claims to have helped more than 50,000 people sell their cars, has 56 branches in 12 cities.

According to 2016-17 financials in RoC filings, the company registered a more than five-fold rise in operational revenue at Rs 417.48 crore, up from Rs 74.79 crore the previous year. Likewise, gross expenditure rose more than six-fold to Rs 497.25 crore for 2016-17, up from Rs 74.98 crore the previous year. Net losses widened to Rs 76.35 crore for 2016-17, up from Rs 24.98 crore the previous year.

Online used-car space

Cars24 operates in a space that has other significantly funded players like CarTrade and CarDekho.  

In March, reports stated that Sequoia, which is now an investor in Cars24, invested around $2.5 million as part of a larger Series B round in CarDekho’s parent, Girnar Software Pvt. Ltd. According to information available at VCCEdge, the data and research platform of VCCircle, the company has raised a little over $96 million in funding till date.

In February, multi-brand used car seller Mahindra First Choice Wheels Ltd secured $15 million (Rs 95.8 crore) from its existing investors, US-based digital marketing company Cox Automotive, private equity firm Phi Advisors and US-based hedge fund Valiant Capital.

In January, MXC Solutions India Pvt. Ltd, the operator of CarTrade.com and CarWale.com, acquired Shriram Group’s unit that sells used trucks, buses and other vehicles, for Rs 156.4 crore ($24.5 million).