Used-car platform Cars24 announced on Monday it has raised $450 million from investors including SoftBank Group Corp’s Vision Fund 2, nearly folding its valuation to $1.84 billion.
The fundraising added a $340 million Series F equity round emphasizing investments from Vision Fund 2, Tencent Holdings Ltd, and DST Global, Cars24 told, along with $110 million in debt from financial institutions.
“With this investment, we will continue to penetrate into existing car, bikes and financing business in India while venturing into new overseas geographies this year,” Vikram Chopra, Cars24 co-founder and chief executive officer, declared in a report.
SoftBank’s Vision Fund 2 includes Indian food delivery startup Swiggy in its portfolio of internet-based purchaser firms while Tencent has invested in now Walmart-owned e-commerce company Flipkart.
Vikram Chopra, the CEO who co-founded the company in Gurugram with Mehul Agrawal, Ruchit Agarwal and Gajendra Jangid, said that the plan will be to use the funds over a variety of sectors.
They include a national and international extension (it’s already serving in India, Australia and UAE, and now has its eyes on more markets); technology (specificallly spaces like more expanding its virtual assessment process, as well as more data science around pricing and other aspects related to selling and after-sales); and backing both to buy in vehicles, as well as to help consumers start buying a vehicle a viable economic option.
“Buying or selling a car is hard anywhere in the world,” Chopra said in an interview. “It’s just a broken experience everywhere, so we are trying to solve for this.”
“Cars24 is building a data-enabled tech platform that is organizing the fragmented used car market in India,” said Munish Varma, managing partner, SoftBank Investment Advisers, in a statement. “We have been closely tracking its approach and efforts that have disrupted the used car retailing in India.”
It’s also a model that investors think will give Cars24 an edge over competitors.
“We have studied used car platforms globally and are struck by the similarities we see between Cars24 and analogous businesses that have scaled successfully,” said Navroz D. Udwadia, co-founder of Falcon Edge Capital, in a statement.
“Cars24 has cemented its first-mover advantage by building wide-ranging supply side moats, which in turn drive demand liquidity on the platform. In positioning itself as a buying and selling solution for consumers, Cars24 drives immense top-of-mind recall. It is rare to find a business as focused on the consumer experience and as driven to ensure it is outstanding via the use of data science and technology. Finally, we are deeply impressed by the founders’ leadership, and are thrilled to back them as they transform the used car industry in India and scale internationally across MENA and SE Asia.”
“Cars24 is at the forefront of transforming the way consumers buy and sell cars by providing a unique end-to-end digital shopping and transaction experience,” said Rahul Mehta, managing partner at DST Global, in a report. “They have emerged as the undisputed leader in the used car space in India and early traction in international markets is exceeding expectations. We love backing founders who are bold and ambitious thinkers and couldn’t be more excited to enter the second innings of our long-lasting partnership with Cars24.”