MXC Solutions India, the parent entity of automobile classifieds portal CarTrade, is set to raise Rs 321 crore ($42.5 million at current exchange rates) in a growth funding round from Singapore state investor Temasek Holdings, and private equity firms Warburg Pincus and March Capital Partners.
They were each issued 1,299,075 Series H compulsorily convertible preference shares, at a price of Rs 825.12 per share, the filings showed.
The three returning investors contributed Rs 107 crore each, as per regulatory filings.
While Warburg Pincus invested through its private equity fund Highdell Investment, Temasek contributed funds via its wholly-owned subsidiary MacRitchie Investments. California-based March Capital Partners put in the money through its investment arm MCP3 SPV.
Post deal, Warburg Pincus will become the largest shareholder, controlling 34.74% of the company, followed by Temasek, which will own 26.71%. March Capital, which previously invested through its venture capital fund Springfield Venture International, will be in charge of 9.87% of the company.
JP Morgan’s CMDB-II fund, which has invested in the company earlier, is the third largest shareholder in the firm, with 12.03% ownership.
MXC Solutions India has raised close to $300 million since its inception in 2019, according to VCCEdge data.
Founded by Vinay Sanghi, former CEO of Mahindra First Choice, the firm also counts Tiger Global, Trident Capital and Epiphany Ventures among its investors.
CarTrade, which acquired rival CarWale in 2015, in a deal estimated to be worth $100 million, is an online marketplace to trade new and used vehicles. It also provides reviews, on-road prices, car comparisons and auto news services.
In 2018, it was in talks to buy a Shriram Group unit that sold used trucks, buses and other vehicles, for Rs 156.4 crore.
MXC Solutions India also operates CarTradeExchange, a portal that helps automobile dealers manage their business operations.
According to the financial year 2019-20 provisional profit and loss account, MXC Solutions India is set to make a profit of Rs 8.88 crore (before tax). The company recorded a net profit of Rs 2.66 crore for the year ended March 31, 2019.
CarTrade competes with companies such as CarDekho, Cars24, Droom, Spinny and Truebil, apart from horizontal peer-to-peer platforms such as OLX and Quikr.
The sector has seen significant investor traction over the past two years.
In March, Spinny raised $43.7 million in a Series B funding round led by The Fundamentum Partnership. While Droom has raised over $125 million in six funding rounds, Cars24 has secured $200 million till date and CarDekho has bagged $215 million so far.
Cars24, Droom and OLX spent generously during the financial year 2018-2019, even as the losses piled up and growth in the overall automotive market slowed. The three companies together put to work Rs 2,652 crore during the year, with each spending significantly higher this year on advertising and marketing in a bid to grab market share.