Jaipur-headquartered CarDekho, which runs online platforms for new and used cars, has landed into the unicorn club after raising a USD 250 million Series E round led by Leapfrog Investments at a valuation of USD 1.2 billion. Canyon Partners, Mirae Asset, Harbor Spring Capital, and existing backers Sequoia Capital and Sunley House also participated in the funding.
This pre-IPO round comprised USD 200 million in equity and USD 50 million in debt, the company said in a statement on Wednesday, without revealing the timeline for its public listing.
With the latest fundraise, CarDekho became the 33rd company to turn into a unicorn in 2021. The 13-year-old firm plans to utilize the fresh funds to accelerate the growth of pre-owned car transactions as well as automobile financing and insurance. Currently present in India, Indonesia, and the Philippines, the company will also use the funds to expand internationally.
CarDekho buys cars from customers from more than 100 markets and sells them on its platform, along with new cars. It operates various auto portals such as CarDekho.com, Gaadi.com, ZigWheels.com, BikeDekho.com, InsuranceDekho.com, and PowerDrift.com, among others. The company works with over 3,500 new auto dealers and 4,000-plus used car dealers and collaborates with more than 14 financial institutions and 40-plus insurance companies to facilitate used car finance and insurance. In September 2021, it reached a USD 100 million annual revenue run rate.
Amit Jain, co-founder and CEO of CarDekho, said the company has evolved to become a complete ecosystem for car buying, lifecycle management, and selling from being a car research portal over the last decade. “The new funds will help us expand our used car transactions and financial services businesses,” he added.
The company also counts marquee investors, including Sequoia Capital India, Hillhouse Capital, Ping An, Sunley House, CapitalG, Times Internet, Trifecta, Times Internet Limited, Kreatif Media Karya, and Dentsu, among others, as backers.
“We expect CarDekho to continue on its rapid growth trajectory thanks to the caliber of the team and the extraordinary tailwinds which this segment now enjoys from increasing formalization, digitization, and transparency,” said Stewart Langdon, partner and co-head of South Asian investments at LeapFrog.
The development comes at a time when India’s pre-owned vehicle market is heating up—with global investors pouring hundreds of millions of dollars into the rapidly growing segment and incumbents eyeing public markets.
Last month, Gurugram-based Cars24, a platform for selling and buying used motorbikes and cars, raised USD 450 million in Series F from SoftBank, Falcon Edge, and Tencent, along with participation from existing investors. Earlier in July, used car marketplace Spinny closed a USD 108 Series D round led by Tiger Global. That same month, another competitor, Droom, said it received the first tranche of USD 200 million pre-IPO funding round, which turned it into a unicorn at a valuation of USD 1.2 billion. The automobile platform is reportedly looking to file draft papers for a USD 135 million IPO with the Indian market regulator later this year.
Droom’s IPO will follow the public listing of CarTrade, an online marketplace for new and used vehicles that took place earlier in July. Through the public issue—which was a complete offer for sale by existing investors and shareholders—CarTrade raised INR 29.9 billion (USD 403 million), giving its backers a successful exit. Furthermore, ride-hailing giant Ola has also entered the new and pre-owned car retailing business recently in a bid to diversify its product portfolio after the COVID-19 pandemic dampened the demand for its core business. With CarDekho entering the elite billion-dollar-plus club and eyeing public markets, the online auto sector is set to become even more competitive.
