Cars24 Services Pvt., India’s largest online platform for used cars, is planning to close a deal to raise $350 million. The company will be raising funds from SoftBank Group, DST Global and other investors.
Cars24 would be the latest Indian company to jump into the current IPO bandwagon.
India has witnessed a record year in terms of IPO. So far, 38 Indian companies have filed for IPO this year, raising Rs. 71,833.37 crores. Reports claim that Cars24 is aiming to launch its initial public offering within 18-24 months.
A Close Look into the Matter
The fundraising round will bring in $200 to $250 million into Cars24, thereby putting its valuation to $2 billion. With Falcon Edge Capital as one of the major investors, Cars24 fundraising would conclude within the next 2 weeks. Cartrade Tech Ltd., which is another online automobile marketplace, is going to begin shares trading on 20 August 2021.
The pandemic has made Indian consumers avoid mass transit. This has significantly boosted sales of used automobiles in the country. However, increasing sales of second hand vehicles have negatively impacted the sales of new vehicles. India is a booming market for used automobiles right now. Cost-conscious Indian consumers are more inclined to opt for pre-owned cars.
About the Company
Founded in 2015, Cars24 is a Gurgaon-based start-up. It was founded by Mehul Agrawal, Vikram Chopra, Gajendra Jangid, and Ruchit Agarwal. It was launched with an aim to simplify the process of buying used vehicles.
Buying and selling of used cars in India were quite different before the launching of online platforms. It was usually an inconvenient, delayed, and cumbersome process that was typically dominated by the street-corner shops. Consumers usually had to face unfair and dishonest pricing. Moreover, the condition of the cars was also a serious concern for them.
Cars24 wanted to make the process of purchasing used cars to be as hassle-free and convenient as buying a gadget or a home appliance. Before listing, Cars24 refurbishes all the vehicles in its reconditioning facilities.
The company uses AI algorithms and other software-based technologies to determine car pricing. It also uses obtained data to find out which vehicle would be the most appropriate for a particular consumer.
As per company policy, consumers can return purchased cars within 7 days without any questions asked. They can also enjoy a 6-months warranty period. Apart from vehicles, Cars24 also provides various financing options to proffer customers a smooth purchasing experience.
The company also sells used motorcycles and scooters on its platform.
The fundraising is expected to provide a necessary boost to the company ahead of its IP. The details are, however, not finalised yet.
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Frequently Asked Questions
- What is the IPO opening date of Cars24?
The company has not yet decided on the IPO details.
- What is the current valuation of Cars24?
As of November 2020 Cars24 valuation had crossed $1 billion.
- Who are the major investors in Cars24?
Agnelli Family, Unbound, Moore Strategic Ventures, Sequoia India, and KCK are some of the major investors in the Cars24 platform.