Cars24 valuation almost doubles to $3.3 billion with $400 million financing

Cars24 has closed a $400-million funding round led by returning investor Alpha Wave Global, formerly known as Falcon Edge Capital, and participation from other existing investors, valuing the platform at $3.3 billion, the online used cars retailer said on December 20.

The round comprises $300 million equity financing and $100 million from diversified financial institutions in India, Australia, and the UAE. The funding nearly doubles the company's valuation from $1.8 billion in September 2021 when it raised $450 million funding led by DST Global, Falcon Edge Capital and SoftBank Vision Fund. This is Cars24's third funding round in over a year.

"Cars24 has aggressive plans for 2022 and beyond, and we can’t wait to put this investment to work," co-founder and CEO Vikram Chopra said. "As we continue to build the best infrastructure for the future with an end-to-end digital customer experience, we are confident that this will delight our customers with our high-touch industry experience."

The company plans to use the funds to accelerate its global expansion in the Middle East, Australia and Southeast Asia and further strengthen its foothold in the Indian market. The proceeds will also be used to improve its technology.

Founded in 2015 by Vikram Chopra, Mehul Agrawal, Ruchit Agarwal and Gajendra Jangid, Cars24 was initially a seller-focused platform to sell a car.

The platform would either sell the car to a dealer, or use its auctioning platform to find a buyer along with insurance, servicing, and a loan, if needed. The company said it reported a 50 percent growth in the last quarter and claims to have 90 percent market share in the online used-car segment.

In June 2021, the firm also started catering to buyers, potentially expanding its market manifold. It recently announced the launch of seven mega refurbishment labs (MRL) in India and in the UAE.

In India, these centres are set up across 35 acres of land in cities such as Delhi and its suburbs, Mumbai, Bengaluru, Ahmedabad, Chennai, Hyderabad, and Pune to provide buyers’ access to high-quality used cars coupled with a warranty through a trusted channel, the company said.

Around 20,000 cars are expected to be refurbished at these centres in a month.

"Cars24's robust competitive moats across in-house reconditioning, access to the widest assortment/supply and deep data science drive a delightful customer experience, and reflects in its best-in-class NPS. We believe this investment will help Cars24 fortify its moats even further and scale 10x from here over the next few years" said Navroz D Udwadia, Co-founder and Partner, Alpha Wave Global.