The used car market is getting another major combination of venture capital today, with one of the faster scaling startups out of India picking up a major round of financing to double down on growth: Cars24 — a site and app that sells users cars and used two-wheeled motorbikes — has raised $450 million, a Series F of $340 million and $110 million in debt. The investment values Cars24 at $1.84 billion post-money, the firm said, making it one of the more valuable privately-held used car startups globally.
DST Global, Falcon Edge and SoftBank Vision Fund 2 co-led the Series F, with Tencent and presented investors Moore Strategic Ventures and Exor Seeds also participating. The debt round came from a mix of financial institutions. This fundraise, now confirmed and official, was rumored in last weeks, although at a smaller amount: it didn’t consist of the debt portion, and some reports were based on regulatory filings for less than the sum ultimately raised.
Vikram Chopra, the CEO who co-founded the company in Gurugram with Mehul Agrawal, Ruchit Agarwal and Gajendra Jangid, said that the plan would be to use the funds across a range of areas.
They include national and international expansion (it’s already operating in India, Australia and UAE, and has its eyes on more markets); technology (specifically areas like further expanding its virtual appraisal process, and more data science around pricing and other details related to sales and after-sales); and financing both to purchase in vehicles, as well as to aid consumers make buying a vehicle a viable economic option.
Cars24 is active in 130 cities in India, and it has sold 400,000 vehicles to date (both cars and motorbikes) with upwards of 13 million monthly visitors on its site. All this gives it claim to being the largest platform of its kind in India. But its ambition is to enhance the inefficiencies of selling a car, or buying a used car, in many parts of the globe, not just its home market.
“Buying or selling a car is hard anywhere in the world,” Chopra stated in an interview. “It’s just a broken experience everywhere, so we are trying to solve for this.”
This is also where the financing and technology figure notably. When Cars24 first started out in 2015 in India, Chopra said, it faced the added issue (or opportunity?) of a tricky economic landscape with very low car ownership penetration overall — just 2%, or 2 cars per 100 people, compared to typically between 50 and 80 cars per 100 people in Europe.
“But buying a used car in India is a way for a person to own any car,” Chopra said. In a country like India, “we want to take the penetration to 10 or 15.” He added that the car resale market today in India is around $25 billion, but is on track to soon get to $100 billion.
Cars24 has been set up around a “buying-in, fixing up, and then reselling” model similar to that of the real-estate juggernaut Opendoor: it appraises vehicles from individuals looking to sell them; buys them up if an agreed price can be reached; reconditions them; and then re-sells and delivers them to new owners. This model, Chopra said, gives Cars24 an edge over some of the shortcomings that exist with traditional players (both on and offline).
First, it offers a centralized platform, cars24.com and its corresponding app, where users can browse a one-stop-shop inventory that goes