There are more than 30-35 lakh used car sold every year as compared to the sales of new care that is only 20 lakh, by this data its crystal clear that the market of used car is bigger and more in demand. However, there is a strong consumer demand but the supply is limited and restricted. Selling a used car was way to difficult task before the emergence of online portal that made lives easier. One such major portals is CARS24, that makes the selling of used cars very simple and easy.
ALL ABOUT CARS24-
CARS24, founded in August 2015 by Vikram Chopra, Mehul Agarwal, Gajendra Jangid, and Ruchit Agarwal is an e-commerce car selling and buying platform, that aims to make the entire car selling and buying process easier and effective. The company is a advanced technological e-commerce platform for used cars and bikes, which helps to make buying and selling cars at breeze. The e-commerce platform provides a variety of certified pre-owned cars along with a easy and convenient home delivery with just a click of a button. On the other hand, CARS24 even looks after their sellers, whom the company promises to offer the best price of their cars within an hour.
Having the AI-enabled pricing system, that helps the startup, CARS24 to provide with the accurate market price along with the appraisal value of the car. The startup is an ISO 9001:2015 certified company as well as one of the fastest growing pre-owned car marketplace in India. I CARS24 is the first ever company in the used-car industry to come up with a ‘transaction led’ approach to sell a car, which helps the potential car owner to sell their car very easily with a complete security within 2 hours and get paid instantly.
After analysing the used-car industry, the founders realized that the industry was in a complete chaos. Apart from this, the industry is full of gaps that are unmended from the beginning, that is when it comes to selling and purchasing of used cars, the standard level of procedure is missing. Further, the industry even lacked any technological advancements that would help in valuation of used cars. Therefore, after a thorough study and research of these issues in the market of used car, CARS24 was launched in order to solve these issues and making the procedure of purchasing and selling used cars easy and convenient.
“Our mission is to revolutionise the way used cars are bought and sold across the world”, says the mission statement of the company.
BUSINESS AND REVENUE MODEL OF CARS24-
The company follows a customer-to-business (C2B) model that is, it buys cars from individuals and sells them to the dealers. Unlike a classified platform, Cars24 helps in end-to-end transactions and charges commission for each transaction, which come to to 4-5% of each transaction amount. The sale of the pre-owned is the largest revenue factor for the company. Further, comes the financing services that the Cars24 provides its customers, followed by the commission and service income. The unicorn user-car retailers also make non-operating revenues from the return on financial assets.
The CARS24 business model stays around the parameters of buying any car from its owner at the best price compared with other pre-owned car services in the area. Thus, the company aims to offer Indian consumers an alternative to other tedious means of selling a used car, thus making this process simple and convenient. Regardless of the model, age, or condition of the car, the company offers guaranteed price on any car
GROWTH OF CARS24-
Currently, CARS24 is considered as a market leader in the online used car industry with more than 90% of market share. In a recent interview, CEO and Co-founder Vikram Chopra said, “We sell nearly 20,000 cars every month, about 250K in a year. This is just shy of a billion dollars worth of cars now. We are now present across over 200 cities in India with a 7000 strong workforce.”
Cars24 witnessed a significant decline that is around 12.6% in its operating revenues at $371.3 million during FY21, which were reported to be around $424.7 million in FY20. The sale of used or pre-owned cars is the biggest revenue generator for Cars24 in FY21, which has reached to 97% of the total operating revenues of the company. The annual revenue of CAR24 grew by 65-70% with an annual run rate of $1 billion for FY22 as of December 2021, said Jangid.
The leading online used-car selling platform stated that it would be buying Rs 75 crore worth of shares from its employees as part of its ESOP plan. This single buyback is estimated is valued to be more than half of the amount that the company has sold to its employee shareholders as of now.
CARS24 FUNDING AND INVESTORS-
Till date, CARS24 witnessed a total amount of $1.52 funding. On 24th November 2020, the company entered the unicorn club after raising $200 million funds in Series A funding round that was led by DST Global. CARS24 became the second company to enter the unicorn club from the used car industry. The company raised a fund oh $400 million in its Series G funding round that was led by Alpha Wave Global on December 20, 2021.
The company previously witnessed a massive $450 million round of equity and debt led by Softbank, Tencent, DST Global, and others on September 20, 2021. With the latest funding round, the valuation of the company was at $3.3 bn, as of December 20, 2021. In August, Mahendra Singh Dhoni even invested an not mentioned amount in Cars24 as a part of a Series D round. Following the deal, Dhoni became the brand ambassador and owned equity in the company.
By Gitika Mandhana