Multiple people familiar with the situation said Cars24, an online marketplace for used cars, is in final negotiations to close a $300-350 million funding round led by existing backer Yuri Milner’s DST Global, with participation from new investors such as Falcon Edge, Carlyle Group, and SoftBank Vision Fund.
Bloomberg reported that the whole funding may value Gurugram-based Cars24 at $2 billion, citing people familiar with the situation. The funding round may be completed within the next several weeks. The finance plans are also in line with Cars24’s aspirations for a big IPO in the following 18-24 months.
“The (fresh) round is oversubscribed and the final size could be between $300-350 million… There is a lot of interest from new investors,” said one person in the know. The official closing of the investment round is still a month or so away, this person added.
In November of last year, the firm secured $200 million in a Series E round headed by DST Global with existing investors Exor Seeds, Moore Strategic Ventures, and Unbound to become India’s first used automobile unicorn.
DST Global has also financed Indian firms such as Swiggy, Udaan, Ola, and Byju’s.
CARS24 received $100 million in Series D funding from current investors KCK, Agnelli (Fiat) Family, Sequoia India, Unbound, and Moore Strategic Ventures in October 2019.
In the midst of the pandemic, India’s used car industry is thriving. People are seeking for ways to avoid taking public transportation as the risk of illness grows. Rather than purchasing new cars, many budget-conscious consumers opt for used cars.
Vikram Chopra, Mehul Agrawal, Ruchit Agarwal, and Gajendra Jangid established Cars24 in 2015. Sequoia India, Exor Seeds (the venture arm of Exor, one of the world’s largest holding companies controlled by the Agnelli family), DST Global, Kingsway Capital (a London-based investment firm), Unbound (a global investment firm headquartered in London), Moore Strategic Ventures, and KCK are among the major investors in the online marketplace (Silicon Valley & New York-based investment firm).
Cars24 and other online platforms in the used automobile market have noticed a considerable increase in traffic since the coronavirus epidemic. The demand for used cars has increased on Cars24. It has been planning to add new services such as two-wheeler sales and after-sales support.
According to a new report by consulting firm RedSeer, India’s used-car market would witness considerable, technology-driven development in the coming years as people avoid public transportation in the wake of the Covid-19 outbreak. According to ET, the car services and repairs market is expected to increase at a compound annual growth rate of 12% to reach $25 billion by 2030, up from $8 billion last year.