Cars24 gets $400 million in new funding, valuation jumps to $3.3 billion

Cars24, an online platform which sells used cars, has closed a $400 million financing round led by Alpha Wave Global, formerly Falcon Edge Capital.

This includes a $100 million debt component which has been sourced from investors like Commercial Bank of Dubai and IFM Investors in Australia.

After the funding, Cars24’s valuation has jumped more than 80% from its previous funding in September to $3.3 billion. At that time, the company had closed a $450 million funding which was led by the likes of SoftBank Vision Fund, Alpha Wave Global and Yuri Milner’s DST Global. The Gurgaon-headquartered company was valued at $1.8 billion back then.

ET first reported in its November 29 edition about the latest fundraise. The report had said the company was in the final stages of discussions to mop up new funds at a significantly higher valuation.

Cars24’s other existing investors have also participated in this round, the company said.

Aggressive on global expansion

Cofounder Gajendra Jangid said the firm has been expanding globally this year and will continue on that strategy. “This is a $100 billion market opportunity in India and abroad, and a much larger game … The latest funding will help us make a dent not only in India but abroad too,” he said.

ET reported last month that the company was looking to expand to the Middle East and Southeast Asia. It recently entered Thailand and has been present in the UAE and Australia.

Jangid said Cars24 will use the new capital for large-scale refurbishing labs across the country to improve the quality of cars before they are sold to customers. This is part of its plans to go deeper within India.

The company is clocking an annualised revenue run-rate of close to $1 billion, based on last’s quarter performance, he said. This includes revenue from the lending vertical through its non-banking financing company unit, which offers vehicle financing.

Annualised revenue run rate is a projection of upcoming revenue based on what the company posted during its best performing month.

ET reported last month that Cars24 was selling about 20,000 cars per month compared with 15,000 earlier in 2021. “We have grown 70% in calendar year 2021 compared to 2020. About 50% of our users opt for financing options,” Jangid said.

The company is sitting on a loan book of around Rs 1,500-1,600 crore, he said.

Founded in 2015 by Vikram Chopra, Mehul Agrawal, Ruchit Agarwal and Jangid, Cars24 became a unicorn last year in a $200 million funding round led by DST Global.

“Today, we are witnessing greater acceptance amongst customers across the globe for our platform when purchasing their next car. 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,” Chopra said in a statement.

Navroz D Udwadia, cofounder and partner, Alpha Wave Global, said he has backed Cars24 yet again as the company continues to cement its leadership positions across India, the UAE, Australia and other international markets.