In the Indian Grand Prix for used cars, one startup just zoomed ahead

Photo Credit: John Lloyd

Who buys used cars? India sure does. A hot market for automobiles, the country has plenty of people waiting to grab your four-wheeler. As long as it’s in running condition and isn’t too dented for a makeover.

I remember buying my parents’ Maruti 800, at one time a tiny symbol of Indian pride, when it was already 10 years old. I sold it off three years later to a perfect stranger – for a neat profit.

That was at a time when startups in the online auto trade were yet to make their presence felt. Back then, middlemen – like neighborhood drivers, car mechanics, car dealers, or just about anybody who kept his eyes and ears open – put the buyer in touch with the seller.

But today startups like CarTrade, Droom, and CarDekho have emerged as go-to names in the space. The likes of Snapdeal and Quikr have also jumped into the used car business that is estimated to be worth US$125 billion in the country.

In a sure sign that the market is hotting up, online auto classifieds site CarTrade today announced it has raised INR 9.5 billion (US$145 million) in funding from Singapore-based Temasek and global investment firm March Capital.

Existing investor Warburg Pincus, a leading international private equity firm, also participated in CarTrade’s funding, the startup said in a statement.

Going into top gear

Photo Credit: Paul

The funding for CarTrade is being called the second-largest investment in an Indian listings startup. Only Quikr has raised a bigger round of US$150 million last year.

“This investment is a validation of CarTrade’s business model and growth plans in the Indian online auto space. The funds raised will be used to expand our services organically and through acquisitions,” Vinay Sanghi, founder and CEO of CarTrade, said in a statement.

CarTrade was founded by Vinay, a former CEO of Mahindra First Choice, in 2010. Rajan Mehra, former country head of eBay India, is also a founder-director in the company.

In November, CarTrade acquired rival CarWale from German firm Axel Springer for around US$100 million, making it one of India’s largest auto classifieds platforms. Together they get over 32 million visits per month and work with approximately 10,000 new and used car dealer partners.

The grand prix