India’s latest unicorn is Cars24 after its $200m fundraise

The fundraise was led by investment firm DST Global. Existing investors such as Exor Seeds, Unbound, and Moore Strategic Ventures also participated in the round.

The Indian startup will use the money to bolster its new line of businesses, which includes pre-owned two-wheelers, customer financing, and servicing. It will also go towards hiring, brand building, and increasing market share from the current 4% to double digits.

Founded five years ago, Cars24 has 230 branches across 100 cities. It claims to be operating above pre-Covid levels, with annual transactions exceeding 200,000 units and a 4x increase in website engagement.

“The market for used cars and bikes in India is a huge US$50 billion opportunity and we are the best set up to ride on these tailwinds,” said CEO and co-founder Vikram Chopra.

While new car sales were recorded at 3.6 million units from 2018 to 2019, 4 million secondhand cars were bought and sold in India during the same period, according to a IndianBlueBook report.

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Cars24 competes with Carwale, CarTrade, Droom, CarDekho, Spinny, and more, along with players such as Quikr and Olx India.

Chopra also said that Cars24, which takes a cut of each transaction, is on track to generate estimated gross annual revenue of US$600 million.

“People who did not have cars were looking to own a car due to safety issues, while many others wanted to upgrade from two-wheelers. There was a surge in traffic on the website and monthly transactions surpassed pre-covid levels,” said Chopra.

A McKinsey & Company report also states that a third of consumers        now value constant access to a private vehicle, as compared with pre-Covid levels, especially among younger people.