BackCardekho eyes acquisitions for global expansion, grows verticals
Girnar Software that operates the auto classifieds portal is planning to make up to five acquisitions by March as part of its overseas expansion
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Mumbai: Girnar Software Pvt. Ltd. that operates auto classifieds portal Cardekho.com and Bikedekho.com is planning to make up to five acquisitions by March as part of its overseas expansion, said Mohit Yadav, Asia-Pacific head of its international portal Carbay.com.
Jaipur-based Girnar Software was founded by brothers Anurag and Amit Jain in 2008. The company, which started its international expansion in March, has expanded to 25 countries under Carbay, which provides information on cars and dealers.
Asia-Pacific is the focus region for this expansion, Yadav said. The company has begun hiring for countries in the region and expects to start marketing by February. In the next phase, it will look at Middle East and Latin America.
“These regions are four to five years behind India when it comes to technology and organization of the market; hence, we see a lot of potential of growth," Yadav said.
Expansion in India will involve value-added services. The company that started with used cars, expanded to the new cars segment, insurance, accessories and tyres this year. It has also launched its roadside assistance services across a number of cities in India.
“In case of emergencies, when the vehicle breaks down, there is always help needed, and an assured and reliable roadside assistance scheme is difficult to find; hence, we saw an opportunity," said L.K. Gupta, chief marketing officer with Cardekho. These would include services such as changing flat tyres, towing, assisting with dead batteries and medical help, among others. These services can be availed of by users on annual subscriptions costing 999-1,699. It plans to launch these services in Mumbai and other cities by January 2016.
As e-commerce companies have built awareness, online transactions have grown considerably. This has had trickle-down effects on sectors such as online auto classifieds firms. In case of the used car market, online sites work with dealers that also operate in the new cars segment.
“With growing acceptance, online firms have grown their portfolio of services to include new cars, accessories and other services. In addition to this, global companies such as Volvo and General Motors are encouraging sale of vehicles online, this trend would creep into India. Users after a few years wouldn’t mind buying a car online after test driving and seeing it once," said Sridhar Venkatachari, partner with Grant Thornton India LLP.
Currently Cardekho.com lists 120,000 used cars and has partnered with 3,700 dealers for new cars. Girnar raised $50 million in funding in January this year and acquired Zigwheels.com in October.
The auto classifieds industry is witnessing consolidation. Mumbai-based rival CarTrade.com from MXC Solutions India Pvt. Ltd acquired new car-selling portal CarWale.com from Automotive Exchange Pvt. Ltd for an undisclosed amount in November. The other companies in the used car segment include Droom Technology Pvt. Ltd that raised $16 million in a round led by Lightbox in July this year and Truebil (Paix Technology Pvt. Ltd) that raised $500,000 in its first funding round from KAE Capital in June.
Venkatachari adds that the challenges for the used-car market would be related to financing, loans and interest rate. “It is easier to get a loan for a new car than an old one. In addition to this, online sites would have to either tie up with agencies or provide verification and quality check information on used cars effectively," he says. Cardekho, Cartrade, Droom and others provide their own warranty and verification services that rate a car on various parameters.
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