India: CarDekho seeks to raise funds to expand its used car retail biz

CarDekho founders Amit Jain (left) and Anurag Jain. Photo: Mint

CarDekho, the online portal for new and used car sales, plans to raise funds to expand its used car retail business in certain metro and non-metro cities, said Amit Jain, co-founder and CEO of the startup.

However, CarDekho is yet to decide on an investment bank to conduct the fundraising round. According to Jain, the amount raised will be more than what CarDekho had managed in the previous rounds.

In January 2019, the Girnar Software Pvt. Ltd-owned venture had raised around $110 million from Hillhouse Capital, Sequoia Capital and Capital G of Alphabet, followed by a $70 million Series D funding round in December 2019 from Hong Kong’s Ping An Global Voyager Fund, Sequoia Capital and Hillhouse Capital.

The Indian used car market is around 1.5 times of new car sales and industry executives expect old car sales to increase in volume after the pandemic.

Automakers and startups are eyeing a share of this market, which is primarily dominated by unorganized players.

“Given that the business we are getting into is very asset heavy and that we would have to invest, we are preparing for a round of funding. I won’t be able to divulge the amount we are looking for at the moment and we have not yet decided on a banker for the fundraise. However, the amount we are looking at is only going to go north (compared to the last two rounds),” Jain said.

CarDekho will not appoint dealers like automakers and the showrooms will be operated by the company, Jain said.

The company has postponed its decision to open 250 stores, which was announced last year. It will, instead, go for larger format stores in select metro and non-metro cities.

“Bigger stores will give us economies of scale and more leverage on manpower efficiency. We will go with the top three-four cities and try different formats,” Jain said.

CarDekho is entering the organized used car business amid rising competition from other startups such as Cars 24, which has already made significant inroads in metro cities.

Automakers are also ramping up their infrastructure for used vehicle sales to improve revenues and generate new vehicle sales.

“We will be a tech-first auto firm; our way of doing business will be different from original equipment manufacturers. Capital requirements for us and OEMs are different. The cost of capital return will also be different. We are trying to keep it very lean, while OEMs try to maintain a covered showroom and other standards. It’s going to be a huge car park much like Carmax of the US,” Jain said.

This article was first published on livemint.com.

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Following vacancies can be applied for (only in Singapore).   

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.