CARS24 Success Story – How It Helps Users Sell the Used Cars in Less Than a Day?
Before the advent of web portals, selling a car was a laborious process. Mahendra Singh Dhoni, the former captain of the Indian cricket team, has endorsed one such website, called CARS24.
The goal of CARS24, an e-commerce platform specializing in online auto buying and selling, founded by Vikram Chopra, Mehul Agrawal, Gajendra Jangid, and Ruchit Agarwal, is to make the entire buying and selling of cars simpler and more effective.
Today’s unicorn-used automobile firm is CARS24. The funding on November 24, 2020, has allowed the business to raise $200 million in financing for the Series A round, allowing it to join the Unicorn Club. CARS24 was valued at $1 billion post-money and was led by DST Global. CARS24 is currently valued at $3.3 billion.
Continue reading to learn more about CARS24’s founders, business plan, revenue, rivals, funding, growth, and other factors.
About CARS24 and How It Works
CARS24 is a cutting-edge e-commerce network that aims to make buying and selling used cars, including cars and bikes, simple. The site provides easy and convenient home delivery services with a large selection of certified cars at your fingertips.
On the other side, the business also looks out for its sellers, promising to credit them with the greatest price for their vehicles in an hour. CARS24 can present the precise market price and the appraisal value of the vehicle according to the startup’s AI-enabled pricing mechanism.
One of the used automobile marketplaces in India that is expanding the fastest is CARS24, which has ISO 9001:2015 certification. CARS24 was the first business in the used automobile market to sell cars using a “transaction led” strategy.
A potential car owner can use this site to quickly and securely sell their vehicle privately in less than 2 hours for cash that will be available right away. On the other hand, CARS24 has thousands of used car companies that purchase these vehicles from these prospective auto owners across India via mobile auctions.
Despite being only 6 years old, the business is already highly sought after as a result of the supply-side performing over 100,000 transactions annually. All of these vehicles are purchased by CARS24 from more than 15 cities throughout the nation and sold to more than 100 cities in India. The company’s distinctive C2B model has enabled it to obstructively overtake the current C2C and B2C models.
CARS24 has built its empire on its distinct advantages and now controls the used automobile ecosystem, which encompasses industries like financial services and information services. In addition to dealing in used automobiles online, CARS24 also has an offline presence in the form of physical storefronts, with more than 155 locations throughout more than 35 Indian cities.
By offering car owners a top-notch customer experience that is quick, simple, and hassle-free, CARS24 is revolutionizing the used car market in India and addressing the difficulties they confront.
The Reserve Bank of India (RBI) also granted CARS24 an NBFC license for its newly created company, CARS24 Financial Services. The business will help finance channel partners grow their companies by facilitating automobile loans to customers through Cars24 Financial Services.
Based on the value of the vehicle they are purchasing, the buyers will be eligible for a credit. The typical loan for clients would be between INR 2.5 Lakh and INR 3 Lakh.
CARS24 – Industry
In India, the market for secondhand cars was estimated to be worth $27 billion in 2020 and is expected to rise to almost $50 billion by 2026. This sector of the economy barely saw any COVID-19 pandemic-related effects. During the years 2021 to 2026, the industry’s CAGR was recorded at 15%.
CARS24 – Founders/Owners and Team
CARS24 was founded by Mehul Agrawal, Vikram Chopra, Ruchit Agarwal, and Gajendra Jangid.
CEO and co-founder of CARS24, Vikram Chopra holds degrees in engineering from the Indian Institute of Technology, Bombay (BTech and MTech), as well as an MBA in finance from the University of Pennsylvania. In addition to serving as a business analyst at McKinsey & Company and an investment analyst for Sequoia Capital, Vikram was a previous co-founder of FabFurnish.
Mehul Agrawal, who possesses an MBA from IIM Calcutta and has previously worked with BCG, is the co-founder and COO of CARS24. Mehul previously founded FabFurnish, an online furniture business.
The co-founder and chief marketing officer of CARS24, Gajendra Jangid, earned his BTech and MTech in engineering at the Indian Institute of Technology, Bombay, just like Vikram. Gajendra worked for Schlumberger before to co-founding CARS24.
Ruchit Agarwal is a co-founder and the chief financial officer of CARS24. Ruchit, a Cornell University alumnus, co-founded CARS24 after working as a vice president at Bank of America Merrill Lynch.
CARS24 today supports a workforce of over 700 employees and operates more than 150 branches throughout 35 Indian cities.
CARS24 – Startup Story
The creators quickly learned that the used automobile business was in complete disarray after scanning the sector. In addition, there are other flaws in the sector that have existed since its inception.
Therefore, there is no established system for buying or selling old cars. The market was also devoid of any technological developments that could have aided in used car pricing and eventually been beneficial.
Finding access to potential customers in the used automobile market without running into confused market participants who are unaware of a full analysis of the car is another challenge.
The creators of CARS24 made the decision to develop a solution to address these problems and streamline the process of buying and selling used automobiles online after carefully observing the market’s inconsistencies.
Mission & Vision for CARS24
The company’s mission is to create an effective and dependable method for used car owners to sell their vehicles at a fair price, revolutionizing the used car market.
CARS24 – Name, Tagline, and Logo
Although CARS24 hasn’t revealed the origin of its name, it most likely stems from their plan to establish a 24/7 marketplace for buying and selling cars.
Business and revenue models for CARS24
The operation of CARS24 is based on a used-car resale company. When compared to other auto resale businesses in the area, the CARS24 business model focuses on the criteria of purchasing any car from its owner at the best price.
In essence, CARSs24 seeks to provide Indian consumers with an alternative to conventional time-consuming methods of selling a used automobile, making this procedure quick and easy.
Regardless of the model, year, or condition, CARS24 gives a guaranteed price on any vehicle. As a result, owners of used cars can sell their vehicles in only one visit to any CARS24 shop.
Additionally, the user of this portal can get an approximate valuation depending on the specifics of their vehicle online. Potential sellers who list their vehicles on this platform are paid right away.
In addition, CARS24 handles the transfer of any necessary legal papers for vehicle registration at no extra charge to the seller. Based on this excellent business plan, this company, which primarily engages in the automotive, e-commerce, retail, and used car trade, has had significant growth since its beginnings.
The C2B (customer to business) concept is used by CARS24. It purchases automobiles from private sellers and sells them to dealerships. In contrast to a classified site, CARS24 supports end-to-end transactions and levies a commission of 4-5 percent of each transaction’s value.
The company’s main source of income comes from the sale of used goods. Following the commission and service income are the financing services that CARS24 provides to its clients. The return on financial assets also generates non-operating revenues for the unicorn user-car sellers.
CARS24 – Growth and Revenue
With over 90% of the market share in the online used automobile market, CARS24 is presently acclaimed as the industry leader. To date, the business has recorded over 4 lakh transactions.
CEO and co-founder Vikram Chopra remarked in a recent interview, “We sell roughly 20,000 automobiles a month, or about 250K annually. There are now about a billion dollars worth of cars here. We now have 7000 employees and are present in more than 200 Indian cities.”
Mega Renovation Labs
On October 20, 2021, CARS24 stated that it would open facilities for refurbishment known as “Mega Refurbishment Labs” (MRLs). According to estimates, it will establish 7 such labs on 35 acres of land in the major Indian metropolises in 2022.
CARS24 Revenue, Expenses, and Financials
While operational revenues for CARS24 were stated to have been around $424.7 million (Rs 3108.8 crore) in FY20, they significantly decreased (by about 12.6%) to $371.3 million (Rs 2,717.9 crore) in FY21.
In FY21, used/pre-owned car sales accounted for 97 percent of CARS24’s overall operating revenues, making it the company’s biggest source of income. According to Jangid, CARS24’s annual revenue increased by 65 to 70 percent, reaching an annual run rate (ARR) of $1 billion for FY22 as of December 2021.
CARS24 – Challenges
The used automobile market has a lot of room to grow, which is why the majority of businesses today are interested in it. As a result, CARS24 must contend with industry entrants as well as current market threats from established businesses. Additionally, maintaining a sufficient supply of old cars could prove to be difficult in the future.
CARS24 Shutdown of Supply-Focused Vertical
On December 10, 2021, the company made the decision to close its supply-only companies in about 82 Indian locations. According to an internal email sent between the country’s co-founders and its workers, the company will only be operating its supply-side business verticals in the top 100 cities of India.
Around 600 staff will be let go, according to CARS24. The market for used cars by unicorns follows a number of other Indian businesses, including Vedantu, Unacademy, Meesho, and others, which have already let go of a sizeable portion of their workforce between April and May 2022.
Cost-cutting initiatives, worry about a shortage of fundraisers, and worry about an impending market recession are the key drivers of layoffs at these businesses. Because the firm is currently planning to automate processes and eventually reduce expenses, the Cars24 layoffs have occurred.
Cars24 announced on May 19, 2022, that it would be laying off approximately 600 employees, which represents 6.6 percent of its whole employment.
Cars24 High-Level Exits
In July 2022, the startup Cars24 anticipates multiple top-level exits following layoffs. This will involve the departure of Jitendra Agrawal from the company, Kingshuk Sanyal, Vice President and Business Head of Cars24, Mrinal Sinha, Chief Human Resources Officer of Cars24, and others.
CARS24 – Competitors
CARS24 is squarely up against the fierce market competition. It faces competition from businesses that operate in the same industry and serve the same clientele, including:
- Quikr Auto
- NDTV Auto
CARS24 – Funding and Investors
To present, CARS24 has raised close to $1.52 billion. On November 24, 2020, the business raised $200 million in Series A financing, making it a unicorn. CARS24 was valued at $1 billion post-money and was led by DST Global. The second business to reach unicorn status in the used automobile market was CARS24.
On December 20, 2021, Alpha Wave Global led CARS24’s Series G round of fundraising, during which the unicorn used-car company raised $400 million, including $100 million in cumulative debt funding.
On September 20, 2021, a sizable $450 million equity and loan round led by Softbank, Tencent, DST Global, and others was invested in CARS24. The company’s valuation will increase to $3.3 billion as of December 20, 2021, according to the most recent funding round.
Mahendra Singh Dhoni also made an undisclosed investment in CARS24 as part of a Series D financing in August. Following the agreement, Dhoni was named the company’s brand ambassador and received stock ownership.
CARS24 began by making car purchases on behalf of the dealers, a practice it kept up until 2019. However, it has since become one of the most well-known used vehicle marketplaces nationwide, and the business has now also begun to operate in Australia, the UK, and the Middle East.
According to sources from June 18, 2021, the business officially started operations in Sharjah, Dubai, Abu Dhabi, and Brisbane, Australia. Additionally, it will soon resume operations in Sydney and Melbourne.
Additionally, it made mention of beginning operations in Middle Eastern and Southeast Asian nations. The corporation has stated that it will spend more than $100 million on its international growth.
The Singapore-based division of CARS24 has become a public business as of October 20, 2021, and is planning to go public in the following 18 to 24 months. The organization, which was formerly known as Global Car Group Pte. Ltd., shall hereafter be known as Global Car Group Limited. Additionally, MS Dhoni leaves the business in part.
CARS24 – ESOPs
The top used-car marketplace announced that as part of its ESOP strategy, it would purchase shares from its employees for Rs 75 crore. This one buyback is expected to be worth more than half of the total amount the corporation has so far distributed to employee shareholders.
CARS24 – Partnerships
Here are a few of the well-known CARS24 collaborations:
On December 30, 2021, CARS24 will join forces with Bajaj Finance Ltd. to make used car financing simple and transparent, enabling a speedy, frictionless, and simplified buying experience.
The Poonawalla Fincorp
To fulfill the consumer loans obtained through CARS24, CARS24 and Poonawalla Fincorp Ltd. have partnered. On November 22, 2021, they made their strategic alliance announcement.
On September 13, 2021, Driva, an Australian online auto financing provider, will join forces with CARS24 in order to expand a loan-matching system that would enable clients to check out with financing in under five minutes.
CARS24 – Future Plans
The approximately 10,000 channel partners that have signed up to use CARS24’s platform are likely responsible for the company’s current success. The business intends to grow the network to more than 20,000 partners over the next two years. The company also asserted that it has aggressively started up operations in a number of Tier 2 and Tier 3 locations.
By FY23, CARS24 plans to generate $2 billion in income. It hopes to make it possible by relying on its plans for international expansion. In addition to solidifying its current position in the Indian market, the corporation has already made clear its aspirations to grow in the Middle East, Australia, and Southeast Asia.
The used-car unicorn firm also has plans to expand into the bike sector in addition to its present market for “cars.” Using the money it recently raised, the company is also aiming to expand its used automobile finance platform.