Cars24 raises $400 mn in funding, valuation up 83% at $3.3 bn in 3 months

Cars24, an e-commerce platform for pre-owned vehicles, on Monday said it had raised $400 million in its Series G round of funding at a $3.3-billion valuation. The company’s previous funding round was in September, when it raised $450 million at a $1.84-billion valuation.

The latest round includes $300-million equity funding alongside $100 million of debt from various financial institutions in India, Australia, and the UAE. The Series G equity round was led by return investor Alpha Wave Global (formerly known as Falcon Edge Capital), along with participation from other existing investors.

The investment will be utilised for the company’s expansion in West Asia, Australia, and Southeast Asia, and to strengthen its foothold in India.

Vikram Chopra, co-founder and chief executive officer of Cars24, said: “The news is just another step in Cars24’s journey; we’re in it for the long haul, and look forward to continuing our work of creating a frictionless consumer experience for used car customers. Cars24 has aggressive plans for 2022 and beyond, and we can’t wait to put this investment to work.”

Navroz D Udwadia, co-founder and partner at Alpha Wave, said: “We are excited to back Cars24 yet again as they continue to cement their leadership positions across India, the UAE, Australia and other international markets. We believe this investment will help Cars24 fortify its moats even further and scale 10x from here over the next few years.”

The pre-owned car market is set to more than double to 8.2 million units, or $47 billion, over the next five years ending FY26 from 4 million in FY21 or $17 billion. This means that two used-cars will be sold for every new car bought, according to a report by JM Financial.

The used-car market was 4.4 million units, worth $19 billion, in FY20, a pre-pandemic year, according to the report, which also forecast a clear highway for the used-card market driven by the pandemic-induced demand for personal mobility and affordability because, after BS-VI implementation, the cost of new cars has been on the upswing.

Earlier this month, used-car sales platform Spinny became the fourth tech company in the segment to enter the unicorn club by raising $283 million at a valuation of $1.8 billion. The other Indian unicorns selling pre-owned cars are CarDekho and Droom. CarTrade, another platform, went public at a valuation of $980 million earlier this year.