Online used car retailer Spinny is closing a $50 million funding round with three new investors coming into an oversubscribed round, despite a wide-ranging automobile sales slump in India.
The new investors include growth equity firm Norwest Venture Partners, US venture fund General Catalyst, and Fundamentum, a fund set up by Nandan Nilekani and former Helion Ventures partner Sanjeev Aggarwal, said three people aware of the matter, requesting anonymity. Mint first reported on 2 October that Fundamentum is in talks to back Spinny.
Its existing investors—Blume Ventures and SAIF Partners—will also participate in the round, while Accel Partners will invest more from its global growth fund, valuing Spinny at about $150 million, said the people cited above.
While General Catalyst will write a smaller cheque, Norwest is expected to invest about $10 million, with the round being split into two tranches because of investor interest.
General Catalyst is one of US’s largest VC funds, currently deploying from a $1.4 billion fund—its ninth and largest so far. It is becoming more active in India, after investing in Cred, the credit card payment startup launched by Kunal Shah, co-founder of FreeCharge, in August this year. General Catalysts’ investments in the US include accommodation startup Airbnb, picture app Snap Inc., and payments firm Stripe, among others.
While Norwest declined to comment, General Catalyst, Accel and Spinny did not respond to emails seeking comment.
Spinny, run by Value Drive Technologies Pvt. Ltd, was founded by Niraj Singh, Mohit Gupta and Ramanshu Mahaur in 2015. It is currently present in Delhi, Noida, Gurugram and Bengaluru, and plans to use the funds to expand to more areas. It is a buyer-focused platform catering to used cars exclusively. In comparison, Sequoia Capital-backed Cars24 is a seller focused platform, while CarDekho is buyer focused for used and new cars.
“Spinny has grown well in the past year, despite being in a somewhat crowded market. It also wants to raise a large round while investor sentiment is still positive, and will have enough runway without worrying about capital for at least a year," said a person tracking the company, among those cited above.
Mint reported on 2 October that online car retailing startups, particularly in the used car segment, are continuing to attract investors despite the domestic automobile industry experiencing its worst sales slump in nearly two decades. This is because the used car segment is still growing well, albeit with a smaller base, and often seen as a substitute for newer cars, and thus unaffected by the slowdown.
Automakers, however, saw a glimmer of hope in October’s sales, with passenger vehicle sales rising 0.3% after nearly a year of weak sales. The turnaround in the passenger vehicle segment was, however, the only exception in the domestic automobile industry where all other segments recorded weaker sales last month.
A total of 285,027 passenger vehicles were sold in the festival month of October, thanks to higher sales by market leader Maruti Suzuki India Ltd and new entrants Kia Motors India and MG Motor India.