CarDekho, an Indian search and e-commerce platform for new and used cars, has become the latest startup in the world’s second-largest market to reach the unicorn status.
The 14-year-old startup said on Wednesday it has raised $250 million — $200 million in equity and $50 million in debt — in its Series E financing round. The round, which valued the Jaipur-headquartered firm at $1.2 billion, was led by LeapFrog Investments.
Canyon Partners, Mirae Asset, Franklin Templeton, Harbor Spring Capital as well as existing investors Sequoia Capital India and Sunley House also participated in what CarDekho has described as its pre-IPO round.
One of the earliest startups in India, CarDekho has expanded to over 100 markets, it says. The startup, which buys cars from customers and then sells them, offers a catalogue of more than 3,000 certified pre-owned cars for online purchase.
CarDekho also provides customers with financial services — the ability to pay in installments — and insurance coverage on cars they purchase from the platform. It said its financial services business is already profitable, while that of insurance has reached the “breakeven” point. (The startup says it works with over a dozen financial institutions to provide loans to customers and over three dozen insurance firms.)
It works with almost all automobile makers in India, and contributes 30% of their annual sales. It also works with over 3,500 new auto dealers and over 4,000 used car dealers, traders and entrepreneurs. It said the firm exceeded $100 million revenue run-rate in the last month.
Auto e-commerce generally has low penetration globally, with India and U.S., for example, having a 1% penetration, according to analysts at Bernstein. “This is largely because the auto market still requires physical inspections and the target market skews towards used vehicles — an unorganized market. The total addressable market in India is around $220 billion, which includes used vehicle purchase by consumers, auctions and remarketing, growth potential for the new vehicles market, and financing and advertisements. The total addressable market for only the used car market in US is over $800 billion,” they wrote in a report earlier this year.
“CarDekho, from being a car research portal, has evolved to become a complete ecosystem for car buying, lifecycle management and selling,” said Amit Jain, co-founder and chief executive of CarDekho. “We are committed to empowering our customers and providing them with a convenient and hassle-free experience.”
He said the startup will deploy the fresh capital to expand its used car and financial services businesses. “The trust and conviction of our investors will help us to accelerate our growth plans whilst we provide our customers with an experience that will continue to redefine car buying and selling.”
The startup is also working to expand its catalog to over 10,000 cars in the “near future,” it said.
Wednesday’s announcement adds CarDekho to a list of nearly three dozen other Indian startups that have earned that coveted status this year. Several high-profile investors, including Tiger Global, Sequoia, SoftBank, Falcon Edge Capital and Temasek, have increased the pace of their investments in India in recent quarters. (For some context, India has about 50 unicorns now.)