Cars24

Cars24 is an Indian marketplace founded in 2015 that simplifies the process of buying and selling used cars. Cars24 is a fairly popular company, actively advertising on television, radio and newspapers. By November 2020, the company has 230 branches in 100 cities of India.

Cars24 aims to make buying a used car as easy as buying a refrigerator or smartphone on the Internet. He evaluates the car using artificial intelligence algorithms and uses the data to determine which car will deliver the least problems to the new owner. Vehicles are repaired in the company's own workshops before they are displayed on its platform. Cars24 has a seven-day return policy with no questions and a six-month warranty. Used motorcycles and scooters are also available on the platform and offers funding.

History

2021

Raising $259 million

In mid-September 2021, information appeared that the Indian car sale service Cars24 attracts $259 million from eight investors, including the Yuri Milner Fund.

Cars24 has become a leader in the used car market, and this is becoming increasingly obvious due to the size of the company, its global ambitions and a new round. After all, the field of used cars turned out to be an attractive segment for venture capitalists and investors in the late stages.

Indian car sale service Cars24 attracts $250 million, including from the fund of Yuri Milner

DST Asia, the Yuri Milner Fund and Alpha Wave Incubation with Tencent invested $75 million each, and Moore Strategic Partners invested $22.7 million, as follows from the documents filed by the company in Singapore. Exor Seeds invested $8.3 million. HPS Investment Partners CEO Scott Kapnik and BloombergSen Investment Partners invested $2.2 million and $472 thousand, respectively.

According to estimates, Cars24 is estimated in the range from $1.72 to $1.75 billion. The company became the first unicorn in the field of used cars with an estimate of just over $1 billion in November 2020.

Until 2019, Cars24 was engaged only in the purchase of cars on behalf of dealers. However, it has diversified into sales to retail customers and now directly competes with CarDekho, Spinny and Droom. Indirect competitors include Mahindra First Choice and Maruti True value. In addition to India, the company also expanded its offerings in the Middle East, Australia and UK markets.

According to reports, Cars24 is also negotiating to raise $350 million with an estimate of about $2 billion, in which SoftBank is likely to take part.

After offering shares in this round, DST Asia became the company's largest shareholder with a 22.8% stake, while new investors Alpha Wave and Tencent each acquired 4.5% of the shares.

If you recall the group of promoters, which includes co-founders of the company Mehul Aggarwal, Vikram Chopra, Gajendra Jangid and Ruchit Aggarwal, then their collective stake decreased to 13.93%.

Following the example of many growing companies, Cars24 has also expanded its ESOP pool. The company decided to increase its ESOP pool to 27,81,345 options, and now its value is about $72.3 million, as separate documents show.^[1]

Attracting investments, including from DST Global

In early July 2021, it became known about Cars24 attracting investments. According to the results of the financing round, which was not completed as of this date, it is planned to receive up to $250 million from investors. Among the participants in the transaction is the DST SoundYuri Milner fund, which had previously been invested in this Indian startup.

Indian car sale service Cars24 attracts $250 million in investments, including from the fund of Yuri Milner

According to Bloomberg, DST Global could become the lead investor in this round. Moore Capital Management will also participate in the investment. It is assumed that according to the results of the investment transaction, Cars24 will be valued at $1.6-2 billion, while in November 2020 - $1 billion.

The agency notes that used car sales in India are growing rapidly because consumers are trying not to use public transport so as not to become infected with COVID-19 coronavirus. While the pandemic has negatively affected the sale of new vehicles, b\u vehicles are in high demand in India, where the poor predominate.^[2]

2020: Attracting $200 million of investments

At the end of November 2020, it became known that the billionaire Yuri MilneradST Global fund invested in the Cars24 used car marketplace.

Cars24, which provides its users with access to the platform for the purchase and sale of used cars, raised about $200 million in the E-series round, as a result of which the company's valuation exceeded $1 billion, which allowed it to join the club of so-called unicorn companies.

DST Global invested in Cars24 used car marketplace

The funding round was led by the DST Global fund, which in early 2020 also invested $122 million in the Indian online training startup Byju's. Existing investors including Exor Seeds, Unbound and Moore Strategic Ventures also participated in the round. Cars24 plans to spend the funds raised on the development of new business areas, in particular on promoting sales of used two-wheeled vehicles, as well as on improving the quality of customer service, hiring new employees, increasing market share from 4% as of November 2020 to double-digit numbers.

Kars24 co-founder and CEO Vikram Chopra noted:

We have created a comprehensive solution for customers in which magic takes place on the backend, thanks to the data processing mechanism we have developed and artificial intelligence technologies that help evaluate cars, determine the best price and ensure speed and stability.

Earlier, the startup Cars24 received the right to act as a Nebankovsky financial institution (NFCU). This will allow the company to develop its consumer lending business (Cars24 Financial Services), the purpose of which is to provide customers with unhindered and instant access to loans.^[3]

Notes