CarDekho, an Indian search and e-commerce platform for new and used cars, has become the latest startup in the world’s second largest market to reach unicorn status.
The 14-year-old startup said Wednesday that it has raised $250 million in its Series E financing round — $200 million in equity and $50 million in debt. The round, which valued the Jaipur-headquartered firm at $1.2 billion, was led by LeapFrog Investments.
Canyon Partners, Mirae Asset, Franklin Templeton, Harbor Spring Capital as well as existing investors Sequoia Capital India and Sunly House also participated in CarDekho’s pre-IPO round.
One of the earliest startups in India, CarDekho has expanded to over 100 markets, it says. The startup, which buys cars from customers and then sells them, offers a catalog of over 3,000 certified pre-owned cars for purchase online.
CarDekho It also offers customers financial services – the ability to pay in installments – and insurance coverage on the cars they buy from the platform. It said its financial services business is already profitable, while insurance has reached a “break even” point. (The startup says it works with more than a dozen financial institutions to provide loans to customers and more than three dozen insurance firms.)
It works with almost all automobile manufacturers in India, and contributes to 30% of their annual sales. It also works with over 3,500 new auto dealers and over 4,000 used car dealers, traders and entrepreneurs. It said the firm exceeded a $100 million revenue run-rate in the past month.
According to Bernstein analysts, auto e-commerce has a low global penetration, with India and the US, for example, having a penetration of 1%. “This is largely because the auto market still requires physical inspections and the target market leans towards used vehicles – an unorganized market. The total addressable market in India is estimated to be around $220 billion, including used by consumers. Includes vehicle purchases, auctions and remarketing, growth potential for the new vehicle market, and financing and advertising. The total addressable market for the used-car market in the US alone is over $800 billion,” he said this year. In the beginning a report was written.
Amit Jain, Co-Founder and CEO, CarDekho said, “CarDekho, being a car research portal, has 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 said the startup will infuse fresh capital to expand its used cars and financial services business. “The confidence and conviction of our investors will help us accelerate our growth plans, while providing our customers with an experience that will continue to redefine car buying and selling.”
The startup is also working to expand its catalog to more than 10,000 cars in the “near future.”
Wednesday’s announcement added CarDekho to the list of nearly three dozen other Indian startups that have achieved this coveted status this year. Several high-profile investors, including Tiger Global, Sequoia, SoftBank, Falcon Edge Capital and Temasek, have accelerated their investments in India in recent quarters. (For some context, there are now about 50 unicorns in India.)