Selling a car used to be a tedious task before the online portals made our lives easier. One such portal, which the former skipper of the Indian cricket team, Mahendra Singh Dhoni endorses is CARS24.
CARS24 was founded with a view to organizing the vastly unorganized used car industry in India. With over 30-35 lakh used cars being sold every year in the country, only 20 lakh new cars were being purchased. This clearly means that the used car market is much bigger and hence there is a strong consumer demand but the supply is restricted. Thus, unlike other market players, CARS24 focussed on the supply instead of the demand. With industry-leading insights, we at CARS24, have been tirelessly trying to drive the supply.
Vikram Chopra, Co-founder and CEO, Cars24,
“Traditionally, car selling or buying has been a tiresome process, however, over the last five years, we have strived to transform the customer’s journey- ‘the CARS24 way’ that is hassle-free, safe and transparent,”
The used car business is a $20-billion market in India which is growing at 25 percent every year. Although the strong consumer demand presented itself as a good opportunity, the bottleneck was less supply. According to Vikram, the biggest challenge is to connect the supply to demand given the fact that the market is unorganized.
Founded by Vikram Chopra, Mehul Agrawal, Gajendra Jangid, and Ruchit Agarwal, CARS24 is an e-commerce platform focussed on online car buying and selling, which aims to make the whole buying and selling process of cars easier and more efficient. CARS24 is now a unicorn used car company. The recent funding on November 24, 2020, has led the company to enter the Unicorn Club by raising $200 million financing in Series A round. It was led by DST Global with a post-money valuation of CARS24 being $1 billion.
Founders of CARS24
Vikram Chopra, CEO, and Co-Founder – He has a BTech and MTech in Engineering at the Indian Institute of Technology, Bombay, and earned an MBA in Finance at the University of Pennsylvania. He is a former Co-Founder of FabFurnish and Investment Analyst of Sequoia Capital and was Business Analyst at McKinsey & Company.
Mehul Agrawal, Co-Founder, and COO – He holds an MBA from IIM Calcutta and has worked with BCG in the past. Earlier, Mehul started an online furniture company called FabFurnish.
Gajendra Jangid, Co-Founder and CMO – Like Vikram, Gajendra too has a BTech and MTech in Engineering at the Indian Institute of Technology, Bombay. Before co-founding CARS24, Gajendra was working with Schlumberger.
Ruchit Agarwal, Co-Founder, and Chief Financial Officer – Graduated from Cornell University, Ruchit was a Vice President at Bank of America Merrill Lynch before co-founding CARS24.
Inception of Cars24
CARS24 is a cutting-edge e-commerce platform for pre-owned autos, including cars and bikes, which strives to make buying and selling autos a breeze. The platform offers a wide range of certified cars along with smooth and convenient home delivery facilities with the click of a button. With the AI-enabled pricing system that empowers the startup, Cars24 can display the accurate market price as well as the appraisal value of the vehicle.
Cars24 is an ISO 9001:2015 certified company and one of the fastest-growing used car marketplaces in India. Cars24 is the first company in the used-car industry that brought a ‘transaction led’ approach to selling a car. With this portal, a potential car owner can very easily sell their car privately with the utmost security in less than 2 hours and get paid instantly.
The company, though just 6 years old, has gone on to become highly sought-after due to the demand of the supply-side conducting over 100,000 transactions a year. CARS24 buys all these cars from more than 15 cities across the country and sells them to over 100 cities in India. The company’s unique C2B model has helped it to leapfrog the existing C2C and B2C models obstructively.
Building this empire on its unique advantages, CARS24 currently dominates the used car ecosystem that includes sectors such as financial services, and information services. Apart from dealing in used cars online, CARS24 also has an offline presence in terms of brick-and-mortar stores, with more than 155 branches in over 35 cities in India. CARS24 is disrupting the pre-owned car industry in India and addressing the challenges faced by car owners, by providing them with a world-class customer experience that is quick, easy, and hassle-free. Cars24 also received an NBFC license from the Reserve Bank of India (RBI) for its new entity — CARS24 Financial Services. With Cars24 Financial Services, the company will facilitate vehicle loans to customers as well as finance channel partners to help them expand their businesses.
Vikram Chopra,
“The business helps people solve real-life problems. Before CARS24 came into existence, selling a car in 1 visit and getting the best price for it was merely a dream. Starting off in stealth mode to transacting over 1.5 lakh cars annually in less than 5 years proves that CARS24 is the choice of people when it comes to pre-owned cars. Even as the COVID-19 restrictions ease, CARS24 is seeing that more than 60% of their seller traffic and 80% of buyer traffic is back to the pre-COVID numbers hence there is a good turnaround in the market.”
CARS24 – Business Model and Revenue Model
The business of CARS24 is modeled on the model of a used-car resale business. The business model revolves around the parameters of buying any car from its owner at the best price compared with other car resale services in the area. Basically, what CARS24 aims to offer Indian consumers is an alternative to other tedious means of selling a used car, thus making this process simple and convenient.
CARS24 offers a guaranteed price on any car, regardless of the model, age, or condition. So, what happens is that used car owners can sell their car in just a single visit to any CARS24 branch. Also, the user can obtain a rough valuation that is based on the details of their car online on this portal. The potential sellers who sell their cars on this platform receive an instant payment.
The company also manages the handover of legal documentation relating to vehicle registration, if any, at no additional cost to the seller. This company mainly operates in areas like automotive, e-commerce, retail, and used car trade, and has grown tremendously since inception based on this stellar model.
Cars24 follows a customer-to-business (C2B) model. It buys cars from individuals and sells them to dealers. Unlike a classified platform, Cars24 enables end-to-end transactions and charges commission for each transaction, which equals 4-5% of each transaction amount. The sale of the pre-owned is the largest revenue driver for the company. Next, comes the financing services that the Cars24 offers its customers, followed by the commission and service income. The unicorn user-car retailers also earn non-operating revenues from the return on financial assets.
Vikram Chopra says,
“People who do not have cars are looking to own a car due to safety issues while many others want to upgrade from two-wheelers. There is a surge in traffic on the website, and monthly transactions have surpassed pre-covid levels,”
Cars24 Funding
In its latest funding round, Cars24 has raised $200 million in a Series E round headed by DST Global, which also involved participation from its existing investors Exor Seeds, Moore Strategic Ventures, and Unbound. This funding has led to the platform emerging as one of the latest 2020 startup unicorns in the nation, with its valuation soaring past a billion dollars.
The platform’s leading investors include Sequoia India, Exor Seeds, Apoletto (the investment vehicle of DST Global’s billionaire founder Yuri Milner), London based multi-billion US$ fund Kingsway Capital, Silicon Valley and New York-based investment firm KCK, London-based investment firm Unbound and Moore Strategic Ventures, the privately held investment company for Louis M. Bacon, founder, and CEO of Moore Capital Management.
CARS24 – Partnerships
Here are some of the prominent Cars24 partnerships:
Cars24 has partnered with Bajaj Finance Ltd. on December 30, 2021, to make used car financing easy and transparent, thereby facilitating a quick, frictionless and streamlined shopping experience
Cars24 and Poonawalla Fincorp Ltd. have come together to fulfill the consumer loans originating through CARS24. They have announced their strategic partnership on November 22, 2021
Australian online car financing company Driva has partnered with CARS24 on September 13, 2021 with an aim to extend a loan-matching system that will help the customers to check out with finance within five minutes.
CARS24 – Future Plans
“Our motive is to expand across India and give our customers a hassle-free selling experience. Any car owner can sell their car at a great price in less than an hour by driving down to the nearest CARS24 branch. To make it a reality, we’ve been investing heavily in making our tech more robust, as well as, convenient and friction-less for all”, added Vikram, co-founder of CARS24.
The company has over 10,000 channel partners registered on its platform and it intends to increase the network to more than 20,000 partners over the next two years. The company also said that it has been actively launching operations in many Tier 2 and Tier 3 cities. Cars24 currently claims to do about 13,500 transactions monthly, with an average order value of INR 3.5 lakh. Cars24 claims to be doing a transaction of 1.5 Lakh cars per year and targeting 1 Million annual transactions by the end of 2021. Cars24 has more than 150 branches across 35 cities in India and is backed by a team of more than 700 employees.
Conclusion
Establishing itself as a renowned name in the used car industry, CARS24 now has a sea of satisfied customers standing by the platform’s name. The platform is confidently set on its path of accomplishing its future goals, displaying a great degree of promise and scope for paving its way towards further growth and dominance in the future.
