Mumbai-based automotive classifieds company- CarTrade has raised USD 42.8M from two of its existing investors Temasek Holdings and Warburg Pincus in Series H funding round, as a result of which its valuation has surged by 35% to USD 525M .
CarTrade had been in touch with the said firms already, as it had raised USD 49.3M in a funding round in 2017, led by Temasek Holdings. In January 2016 it had raised USD 126.7M from Temasek Holdings, US-based March Capital and equity firm Warburg Pincus. After this deal, Warburg Pincus has become the majority stakeholder in the company, holding 34.74% stake USD 182.1 million. Temasek Holdings will bag about 26.7% stake USD 140 million .
CarTrade was founded in 2009 by Vinay Sanghi. Before starting CarTrade, he has had two decades of experience in the automobile industry. While working at family dealership firm ‘Sah and Sanghi’, he realized that there was an imminent need for a one-stop platform for people to find or sell cars, find dealers with used/new cars, since the used cars market in India was very unorganized.
The platform serves as a bridge between buyers and sellers of automobiles, where buyers can also purchase new 4-wheeler directly from the portal. Over 2.5 million used car buyers visit their site every month, according to the company. Customers can be assured of the quality of their purchase as the company provides certification for the used cars.
Some of its main competitors are Gaadi.com, ZigWheels, Oncars.in, Zoomo, CredR, CarDekho, etc. and indirect competitors are OLX & Quikr.
CarTrade is raising fresh funding mainly to generate long-term resources for working capital and expansion of the financing business. It is also planning an IPO in 18-24 months to provide an exit option to few of its investors. CarTrade earned USD 18.3M in FY20, with a total expense of USD 17.1M leading to a net profit of USD 1.18M . However, due to the COVID-19 pandemic, the demand for cars is low, be it new or second hand. Hence, the capital raise may as well be used to survive, rather than grow.
