CarTrade, a Mumbai-based marketplace of new and used cars, is ready to become a unicorn company, those with USD 1 billion-plus valuation, with the recent funding of USD 25 million from Malabar India Fund and IIFL, the regulatory documents filed by the company shows.
The 12-year-old firm allotted 1,336, 310 equity shares on March 31 to Malabar and IIFL, and doubled its valuation to USD 967 million (INR 7,100 crore), a report by local media Entrackr said. Prior to this, the company had raised INR 3.2 billion in Series H from existing investors Temasek, Warburg Pincus, and March Capital Partners in June 2020, at a valuation of USD 525 million.
The company plans to use fresh funds to generate long-term resources for capital expenditure, expansion of the business, and likely foray into financing business, the Entrackr report added.
The startup is inching closer to join the country’s rapidly-growing unicorn club. This year, the world’s third-largest startup ecosystem has already added ten USD 1 billion-dollar companies, of which six achieved that elite status last week. These include fintech firms Groww and Cred, medtech platform Pharmeasy, social commerce startup Meesho, and social and content platforms Gupshup and ShareChat.
Together, they raised a total of USD 1.55 billion between April 5-9 and overall startups raised USD 2.6 billion across 21 deals from April 3-9, a report by local media Economic Times said, citing Venture Intelligence data.
In comparison, there were 12 startups that landed into the unicorn club last year, the higher annual increase in the number of such startups so far.
CarTrade funding follows USD 200 million Series E raised by its Sequoia-backed rival Cars24 last November. The round led by DST Global catapulted the online marketplace for selling and buying used cars into a unicorn.
According to an investor, who declined to be named, “In India, while the vehicle ownership is going up, used vehicle ownership is growing faster. This is the trend which we expect to continue to accelerate.”
“In earlier days, people would buy a car and own it for 15 years, but now that has come down to 5 to 10 years. In western countries, people churn their cars and buy a new one in a few years,” the investor told KrASIA. “That behavior, we would start seeing in India.”
People who are avoiding public transport but can’t afford to buy a new vehicle have started to rely on these online platforms like CarTrade and Cars24 to purchase a used car or bike.
Aside from running a marketplace, CarTrade also runs a vehicle auctioning platform wherein it facilitates auctions of automobiles like cars and trucks for dealers from banks, NBFCs, and insurance companies.
The funding round comes at a time when CarTrade, which competes with the likes of Droom, CarDekho, Cars24, Quikr, and Mahindra First Choice Wheels, is gearing up to go public this year to raise INR 20 billion (USD 267 million).