Cardekho Becomes Unicorn: $250 Million Funding

CarDekho Achieves Unicorn Status with $250 Million Funding

CarDekho, an Indian platform specializing in both new and used car search and e-commerce, has recently attained unicorn status, marking a significant milestone in the world’s second-largest market.

Series E Funding Details

The 14-year-old company announced on Wednesday the successful completion of its Series E financing round, securing a total of $250 million. This comprised $200 million in equity and an additional $50 million in debt.

This funding round resulted in a valuation of $1.2 billion for the Jaipur-based firm, with LeapFrog Investments leading the investment.

Investor Participation

Alongside LeapFrog Investments, the round saw participation from several other prominent investors. These included Canyon Partners, Mirae Asset, Franklin Templeton, Harbor Spring Capital, and existing investors Sequoia Capital India and Sunley House.

Expansion and Services Offered

CarDekho has grown to operate in over 100 markets, offering a comprehensive service that includes purchasing vehicles from customers and subsequently reselling them.

Currently, the platform boasts a catalog of more than 3,000 certified pre-owned cars available for online purchase.

Financial Services and Insurance

Beyond vehicle sales, CarDekho provides customers with access to financial services, including installment payment options, and insurance coverage for their purchases.

The company reports that its financial services division is already operating profitably, while its insurance business has reached the breakeven point. It collaborates with over a dozen financial institutions for loan provision and more than three dozen insurance companies.

Industry Impact and Revenue

CarDekho maintains partnerships with nearly all automobile manufacturers in India, contributing to 30% of their annual sales volume.

The platform also works with a network exceeding 3,500 new car dealerships, alongside over 4,000 used car dealers, traders, and entrepreneurs.

The firm recently surpassed a $100 million annual revenue run-rate in the previous month.

Market Analysis

Analysts at Bernstein indicate that auto e-commerce exhibits relatively low global penetration, with both India and the U.S. currently at 1%.

This limited penetration is attributed to the necessity for physical vehicle inspections and the prevalence of the used car market, which is often unorganized.

The total addressable market in India is estimated at around $220 billion, encompassing used vehicle purchases, auctions, remarketing, growth in the new vehicle sector, and financing/advertising. The US used car market alone represents a value exceeding $800 billion.

Future Plans and Vision

“CarDekho has transformed from a car research portal into a holistic ecosystem for car buying, lifecycle management, and selling,” stated Amit Jain, co-founder and CEO of CarDekho.

“We are dedicated to empowering our customers and delivering a seamless, convenient experience.”

The newly acquired capital will be strategically allocated to expand the company’s used car and financial services businesses.

The company intends to increase its vehicle catalog to over 10,000 cars in the coming months.

India's Unicorn Landscape

This announcement positions CarDekho among a growing list of nearly three dozen Indian startups that have achieved unicorn status this year.

Investment activity in India has been accelerating, with significant contributions from investors such as Tiger Global, Sequoia, SoftBank, Falcon Edge Capital, and Temasek.

Currently, India is home to approximately 50 unicorn companies.