China's Hillhouse may lead $50 million investment funding in Cardekho

MUMBAI: One of China's biggest investment funds, Hillhouse Capital, which manages over $13 billion in assets, is likely to lead a $40-50-million financing round in auto classifieds portal Cardekho. Sequoia Capital, an existing investor, and another investor will also participate in the latest round, sources close to the matter told TOI.

Cardekho's new fund-raise is expected to value it at $250 million, catapulting it into the growing tribe of Indian consumer tech startups with a valuation of Rs 1,000 crore or more. Low-profile Chinese billionaire Zhang Lei, who started Hillhouse a decade ago, is an investor in JD.com, Qunar.com, Grabtaxi, and is credited with backing many mainland China's internet entrepreneurs, including Tencent's Pony Ma. Beijing-headquartered Hillhouse invests across all stages in public and private firms.

Jaipur-based Girnar Software, which owns internet portals Cardekho, Bikedekho and Pricedekho, had received $15 million from Sequoia in November 2013, in its first round of institutional funding.

When contacted, Amit Jain, co-founder & CEO, Cardekho, did not offer any comments while an email query sent to Hillhouse Capital remained unanswered at the time of going to press. Cardekho competes with the likes of Cartrade.com and Carwale.com besides general online classifieds services including Quikr and Olx. Real estate, jobs and auto hold the biggest chunk of the online classifieds market in India.

Last year, Ibibo Group, the Indian unit of South African internet and media giant Naspers, had sold Gaadi.com to Cardekho in a first consolidation move for the sector. Cardekho, which claims to have 10 million unique visitors on its site, expects to garner growth through online advertising by carmakers, subscription charged to used car dealers and new car sales through the portal.

The entry of Hillhouse into India is an indication of the strong appetite among global investors for the thriving domestic tech startup ecosystem. Auto portals are attractive for investors due to the massive potential of car purchases among India's fast-growing middle class and successful IPOs of Chinese players like Autohome and BitAuto. Besides, a group of hedge funds and heavyweight investors like SoftBank Corp and DST Global, and a brand new set of investors is lined up to tap into India's burgeoning digital economy fuelled by the consumer tech companies. Carwale.com, a Mumbai-based auto classifieds player, is also in the market to raise a similar amount of capital, sources indicated.