Girnar Software-owned auto portal Cardekho is in talks with investors to raise a minimum of $150 million (about Rs 1,000 crore), in its largest fundraising exercise yet that could take it to the unicorn club. It is expecting to close the ongoing funding round in the next couple of months. Further, the company aims to use the resources to expand its e-commerce platform for retailing used cars.
CarDekho was set up by a bunch of young, enthusiastic IIT graduates in the year 2008. Its investors include Google Capital, Tybourne Capital, Hillhouse Capital, Sequoia Capital, HDFC Bank, Ratan Tata, and Times Internet.
It had last raised $70 million at a valuation of $725 million in a Series D funding round led by Hong Kong-based Ping An Global Voyager in November 2019. The new round is expected to value Cardekho at more than a billion dollars, the benchmark for a startup to be called a unicorn.
Co-founder Amit Jain said the new platform has made it easier to sell and purchase used cars. A potential buyer can test drive the car he chooses for a week and then decides whether or not to buy it. Cardekho is also giving a six-month warranty on engine and transmission, and offering roadside assistance and financing solutions among other things.
“We have received a very good response (on our online platform). The pandemic has only helped speed up the adoption of this model,” Jain, who is also Cardekho’s CEO, told ET.
Demand for used cars has increased since the beginning of the pandemic, as people looked for personal mobility options to reduce the risk of infection, but at a cheaper cost amid the economic uncertainties. Cardekho, which currently sells vehicles online in National Capital Region, Mumbai, and Bengaluru, plans to expand operations to the top 20 cities by March 2022.
The Indian used car market is around 1.5 times of new car sales. Industry executives expect old car sales to increase in volume after the pandemic. Automakers and startups are eyeing a share of this unorganized market. CarDekho is entering the organized used car business amid rising competition from other startups. One of its biggest competitors, Cars 24 has already made significant inroads in metro cities. Further, automakers, too, have been ramping up their infrastructure for used-vehicle sales; to improve revenues and generate new vehicle sales.
CarDekho was named ‘Website of the Year 2012,’ as well as ‘Best Car Website’ and ‘Most Popular Website.’ CarDekho was also named the ‘Most Popular Automotive Website’ in 2011 and the ‘Best Automotive Website’ in 2009.