India’s largest online marketplace for used cars, Cars24 Services Pvt., Is closing a deal to raise about $ 350 million from DST Global, SoftBank Group Corp. and other investors, according to a person familiar with the matter.
The fundraiser would also include Falcon Edge Capital and value the startup at about $ 2 billion, said the person, who asked not to be identified because the details are not public. The funding now anticipated is greater than the $ 200 million to $ 250 million range that Bloomberg News previously reported. The round is expected to close in the next few weeks, the person said, although details could still change.
Cars24 is starting talks about an initial public offering and aims to go public in 18 to 24 months, the person said. India’s IPO market has exploded and is on track for a record year. Cartrade Tech Ltd., another online marketplace for cars, is expected to start trading its shares on August 20.
Spokespersons for Cars24 and SoftBank declined to comment.
Demand for used vehicles has exploded in India as consumers try to avoid public transportation systems during the Covid-19 pandemic. The outbreak has hit new car sales, but cost-conscious buyers are looking for used cars.
The Gurgaon-based startup outside New Delhi was founded in 2015 by Vikram Chopra, Mehul Agrawal, Ruchit Agarwal and Gajendra Jangid to facilitate the used vehicle trade. Buying and selling cars in India has long been an anxiety-ridden and bumpy process, dominated by familiar sales yards on the corners, and consumers are wary of vehicle prices and condition.
Cars24 aims to make buying a used vehicle as easy as buying a refrigerator or smartphone online. It sets vehicle prices based on artificial intelligence algorithms and uses data to determine which car would give the new owner the fewest problems. Vehicles are reconditioned at the company’s overhaul facility prior to listing on its platform. Cars24 has a seven-day no-questions-asked return policy and offers a six-month warranty. It also sells used motorcycles and scooters and offers financing.