Cars24, the online marketplace for used cars, is in advanced stage of securing another fresh funding round that is estimated to be around $70-80 Mn. This round is likely to be spearheaded by company’s existing investors who are likely to pump $45-50 Mn, according to Economic Times (ET) report. These existing investors include Sequoia Capital, Cayman Islands-based Kingsway FCI Fund and Toronto-based KCK Global.
There are also unconfirmed reports that Cars24 is trying to arrange another $25-30 million from set of new investors. However, the identity of these new investors could not be ascertained.
Till date the Gurugram based company has raised $100 Mn at a healthy valuation of $500 Mn. The company by and large has had a smooth sailing in raising funds from high profile investors including international investors. Some of the foreign funds that have invested in the firm are associated with famed Russian billionaire Yuri Milner and heavyweight investment companies like EXOR N.V.
Cars24 is competing in a space where competition has been steadily rising over the years. This increase in competition is partly because several startups in the online used car space have had a good run on the funding front. Some of these well-funded startups include Droom Technologies, CarDekho, CarTrade and online classified players like OLX and Quikr.
Investor’s euphoria over used car space is backed by figures that clearly shows that used cars are well ahead of new vehicles in terms of annual sales. As per auto industry estimates, India annually witnesses sale of 5 million used cars compared to only 3.5 million new vehicles. Indian buyer’s propensity towards used car is largely because of the affordability and the perception that ‘second hand’ tag doesn’t necessarily diminish the aspirational value of the car.