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Cars24 Services, an online marketplace for used cars and two-wheelers, has raised $450 million in a new funding round led by SoftBank Vision Fund 2, DST Global and Falcon Edge.
The Series F equity round of $340 million also saw participation from Tencent and existing investors Moore Strategic Ventures and Exor Seeds. It has nearly doubled Cars24’s valuation to $1.84 billion from $1 billion last November.
The fundraise included debt of $110 million from multiple financial institutions, according to a company statement.
Cars24 plans to use the fresh capital to deepen its presence in the United Arab Emirates and Australian markets, where it has made recent forays, and build its cars, bikes and financing business in India while investing in technology.
Demand for used vehicles has been rising in India since the covid outbreak as fear of infections prompts more people to opt for personal mobility. This has also turned investor attention towards this segment.
In July, Droom Technology said it was raising $200 million in a pre-IPO funding round at a valuation of $1.2 billion, catapulting the online automobile marketplace into a unicorn—a startup with a valuation of at least $1 billion.
Droom plans to make a public listing next year.
The same month, pre-owned cars platform Spinny raised ₹771.5 crore in a new funding round led by Tiger Global Management.
Last month, CarTrade got listed on the domestic stock exchanges. However, CarDekho, another online platform for used vehicles, is shuttering more than a third of its offline Gaadi retail stores across India, potentially due to the impact of the pandemic on customer visits to brick-and-mortar stores.
“Traditionally, car selling or buying have been a tiresome process, and only two of 100 people own cars in India. With this investment, we will continue to penetrate the existing car, bikes and financing business in India while venturing into new overseas geographies this year," said Vikram Chopra, co-founder and chief executive officer (CEO) of Cars24.
The Gurugram-based startup was founded in 2015 by Chopra, Mehul Agrawal, Ruchit Agarwal and Gajendra Jangid.
Cars24 has sold more than 1,000 cars in the UAE since launching operations there in April this year. It also entered the Australian market last week.
“Cars24 is at the forefront of transforming the way consumers buy and sell cars by providing a unique end-to-end digital shopping and transaction experience," said Rahul Mehta, managing partner at DST Global.
According to data intelligence platform VCCEdge, Cars24 clocked ₹2,998.14 crore in net sales in fiscal 2020—the latest available data—up from ₹1,654.61 in the previous year. In comparison, rival CarTrade recorded operating revenue of ₹298.2 crore in the same period.
Cars24 raised $200 million as part of its Series E funding round last November at a valuation of $1 billion. The funding round led by DST Global turned the online used vehicle platform into a unicorn.
Before this round, Cars24 had raised $100 million in a Series D funding round from both existing and new investors in October 2019.
