India’s CarDekho has acquired unicorn status after raising $250 million in its Series E funding round. The auto e-commerce platform for both new and used cars announced the fundraising on Wednesday; $200 million in equity and $50 million in debt.
The Series E round was led by LeapFrog Investment and brings the startup’s valuation to $1.2 billion. The financing round also saw participation from existing investors – Sequoia Capital India and Sunley House and new investors – Canyon Partners, Mirae Asset, Franklin Templeton, Harbor Spring Capital. The startup which is headquartered in Jaipur, India, and has been operating for about fourteen years described the Series E round as its pre-IPO round, meaning that an IPO may happen in the nearest future.
CarDekho automatically joins a coveted list of startups that have attained unicorn status. India has about 50 unicorns and almost 30 of these attained the status this year. The country has also seen investments from major global investors like Sequoia, SoftBank, Tiger Global, Temasek, Falcon Edge Capital, etc.
CarDeko, which is one of the oldest startups in India, claims to have expanded to more than 100 markets. It buys cars from customers and sells these cars, and offers a catalogue of more than 3,000 certified pre-owned cars for online purchase.
Apart from providing a catalogue of pre-owned cars, the startup provides customers with car insurance services and financial services that let them pay for cars in instalments. CarDekho also has partnerships with almost all automobile makers in the country, making it one of the most trusted service providers in its field. The startup also reportedly contributes 30 percent of sales for these car makers. Apart from carmakers, it also works hand-in-hand with new auto dealers, used cars dealers, traders and entrepreneurs and has a revenue run-rate of $100 million last month.
According to analysts at Bernstein, auto e-commerce has low penetration around the world compared to other aspects of e-commerce. The US and India have 1 percent penetration, according to these analysts, and “this is largely because the auto market still requires physical inspections and the target market skews towards used vehicles — an unorganized market. The total addressable market in India is around $220 billion, which includes used vehicle purchases by consumers, auctions and remarketing growth potential for the new vehicles market, and financing and advertisements. The total addressable market for only the used car market in the US is over $800 billion”, their last year report reads.
Speaking on attaining unicorn status, Amit Jain, co-founder and CEO OF CarDekho said that “CarDekho, from being a car research portal, has evolved to become a complete ecosystem for car buying, lifecycle management and selling”.
“We are committed to empowering our customers and providing them with a convenient and hassle-free experience”, he added.
CarDekho plans to use the recently acquired funds to expand its used cars and financial services business as well as give customers “an experience that will continue to redefine car buying and selling”.
