Cars24, a startup that has built an app and website for selling used cars and motorbikes, raised $400 million in Series G ($300 million in equity and $100 million in debt) at a valuation of $3.3 billion led by Alpha Wave Global with participation from existing investors
Cars24 claims to have a 90% share of India’s used-car market, and it’s gotten there by way of technology. Its tools include a search engine for people to find vehicles (its wide inventory being one of the main unique selling points versus physical used-car lots); options for financing for the vehicle; and logistics software to subsequently organize and carry out vehicle deliveries to new owners. It also has built analytics to measure demand and calibrate pricing and make online assessments of vehicles. Cars24 currently has some 13 million monthly visitors to its site and has sold over 400,000 vehicles (both cars and motorbikes) to date.
“The primary use of the funding will be to continue to strengthen our presence in India, and in the countries where we have expanded,” said Gajendra Jangid, Cars24’s CMO, who co-founded the company with Vikram Chopra (the CEO), Mehul Agrawal and Ruchit Agarwal in Gurugram in 2015. Cars24 is active in some 200 cities in India, and it claims to have grown 50% in the last quarter, a record for the company.
Launching in more developed markets like Australia and UAE has seen Cars24 adjusting its approach based on different market factors, he added.
“In Australia and the Emirates, it’s been about getting a good global supply of cars,” he said. “Because it’s hard to get new cars right now, that’s impacting pricing and demand for used vehicles.”
“Less than 20% of used cars get financed, while more than 80% of new cars sold are financed, so you can see the huge gap,” Jangid said. He said that currently, more than 50% of its customer base is financing vehicle purchases by way of Cars24.