1. Overview
Buying your first car could be a memorable moment of your life and could bring immense joy and excitement to you and your family, even if means a second-hand car. Many digital platforms offer you to buy second-hand cars at the best reasonable prices, but when comes to things like a car you may not want to take any chances or even hesitate to buy due to the fear of getting a bad deal. However, at times when the Covid-19 pandemic has not ended completely and global supply chain crisis, reliable online car marketplaces like Cars24 have relieved the common masses with trust and negotiation issues.
Founded in the year 2015 by its co-founders namely, Vikram Chopra, Mehul Agrawal, Gajendra Jangid, and Ruchit Agarwal, CARS24 is an online marketplace for pre-owned vehicles like cars & autos that offers a wide assortment of certified cars that are home delivered at best prices making the whole process of buying and selling more easier, fair, transparent and haggle-free for the end-user. The purchase and sale of used cars are completed within one hour following a single visit to one of the platform’s branches. Vikram Chopra, Founder & CEO in an interview stated “Traditionally, car selling or buying has been a tiresome process for at least five years now, thus CARS24 has strived to transform the customer’s journey into a hassle-free, safe and transparent manner”.
Currently, CARS24 has10,000+ channel partners over 205 offices in more than 182+ cities in India including its offline brick & mortar stores. Despite the pandemic, the start-up claims to have a 90% share in the used cars market. It also witnesses around 13 million monthly visitors to its site and is known to facilitate 1.5 Lakh transactions every month.
Being one of the largest players in the used car industry, it dominates the used car ecosystem including services such as financial and information services. After raising a sum of $200 million in a Series E funding round led by DST Global, it achieved its unicorn status and India’s first unicorn in the auto segment, making it a big milestone for the company with a present valuation of $3.3 billion in India. Read further to find out more about CARS24 and its founders, business model, revenue, competitors, funding, growth, and plans for the future!
2. CARS24-Mission & Vision
The used car market in India was valued at $27 billion in 2020 and is expected to reach around $50 billion by 2026 with a yearly growth of 15% annually. According to an outlook study made by Mahindra First Choice, the used car market in India is estimated to reach a value between 6.7 M -7.2 M units sold per year by 2022.
For a long time, the used cars industry has been unorganized with a few players who give strong preference to less-aged cars and popular brands with good resale value, resulting in pressure upon the customer to choose from limited options available in the used car segment.
Therefore, CARS24 is on the ultimate mission to bring a revolution in the used vehicle industry and change the mannerisms of buying & selling used cars in the world with an ultimate goal to bring more innovations and build valuable relationships with people to bring more value in their lives. Since its inception CARS24 has come a long way from one single office to 205 offices in 182 major cities in India and has catered to more than four lakh happy customers.
3. How does the CARS24 app works?
CARS24 is a cutting-edge digital platform for pre-owned autos, including cars and bikes, which strives to offer a simple fair, and transparent process of selling & buying cars efficiently. On CARS24 online platform offers a sale/purchase facility for used cars through which a user can directly go on the platform, choose a car and check its attributes, make payment of the token amount, after which the car will be delivered to his/her preferred location at a chosen time with a click of a button. If after delivery of the car, the customer wishes to buy the car, he could pay the remaining entire sum. On the other hand, where a customer intends to sell his used car through the CARS24 platform, he may book an appointment with the nearest CARS24 branch, then make a visit and sell the car. Simple, isn’t it?
Thus, CARS24 is the one & only used car business in the country that adopts a transaction-based approach in its dealings with pre-owned cars. With credible certifications like ISO 9001:2015, it is also one of the fastest-growing used car marketplaces in India which has an AI-enabled pricing system that empowers the startup and helps it to correctly display the accurate market price and the appraisal value of the used car/bike. Apart from payments, CARS24 also manages the sale/purchase-related documentation & paperwork such as RC transfer and authorizes end-to-end transactions.
4. CARS24-Founder & Team
i) Vikram Chopra (CEO and Co-Founder)
Vikram Chopra is the Co-founder & CEO of CARS24. He completed his Bachelor’s and Masters’s in Technology from the Indian Institute of Technology, Bombay, and went on to complete his MBA in Finance at the University of Pennsylvania. Before founding CARS24, he also worked for a while as Investment Analyst at Sequoia Capital and a Business Analyst at McKinsey & Company and also launched another start-up namely FabFurnish.
ii) Mehul Agrawal( Co-Founder and COO)
Mehul Agrawal is the Co-Founder and COO at CARS24. He completed his Bachelor in Commerce from St. Xavier’s College, Kolkata, and completed his Masters in Business Administration degree from IIM Calcutta. After completing his studies, he briefly worked as a Summer Analyst with Morgan Stanley and as a Consultant with the Boston Consulting Group for almost two years. Later, he quit his job to found a start-up namely FabFurnish and CARS24 with Vikram Chopra.
iii) Gajendra Jangid( CMO)
Gajendra Jangid is the Co-Founder and CMO at CARS24. Like Vikram, Gajendra also completed his bachelor’s & master’s in Technology from the IIT, Bombay. After which, he worked for close to nine years in a US-based tech company, Schlumberger in various crucial positions before co-founding CARS24 in 2015.
iv) Ruchit Agarwal(Co-Founder and Chief Financial Officer )
Ruchit Agarwal is another Co-founder & Chief Financial Officer atCARS24. He completed his bachelor’s & master’s in Commerce from Dr. Bhimrao Ambedkar University and went on to pursue courses like CA from ICAI and CFA from the CFA Institute in the USA. He also completed his MBA from Cornell University and started working as an Investment Banking Associate with Bank of America. Before co-founding CARS24 with other founders, he was working as a Vice President at Bank of America Merrill Lynch.
5. CARS24-Story of Inception
While studying the used Cars industry, the Founders observed the fact that each year at least 30-35 Lakhs of Cars were being sold every year but only 20 lakh new cars were being purchased in India. In other words, the used car industry was dominated by unorganized players as there were no standardized operating procedures for the sale/purchase of cars. There was a lack of any technological advancement or innovation which could help to fix a fair & transparent process for car pricing and facilitate a detailed appraisal of the car. As a result, businesses had no means to find customers &customers had to go through a long & tedious process to buy used cars.
Thus, the founders mutually decided to tap on this opportunity by bringing the organization into the used car industry through the adoption of advanced technologies that could help resolve anonymity and bring standardization to the process of purchasing and selling used cars online. Since its launch, CARS24 has met with tremendous success and is one of the four largest players in the used cars industry with an average of 1, 50,000 transactions per month. Its founders Vikram Chopra (CEO) and Mehul Agrawal (COO) have been also recognized for their contribution to the industry.
6. CARS24 – Business Model and Revenue Model
The business model of CARS24 is based on the used car-resale business and primarily revolves around the parameters of buying any car from its owner at the best price compared with other car resale services in the area. It runs on a C2B (Customer to business) and C2C (Customer to Customer model) as it connects with the seller and sells them either to business dealers or direct customers. However, the attribute which differentiates CARS24 from its competitors is its services that enable end-to-end transactions for its customers that include delivery of vehicles and paperwork for which the business charges commission which is generally around 4-5% of each transaction amount. This also makes up for the biggest revenue driver for the business.
Commissions charged for car financings services account for the second source of business revenue for CARS24. It also helps the business to earn non-operating revenues from the return on financial assets.
The CARS24 online platform has a fair and guaranteed price for any car, regardless of the model, age, or condition, which makes it easy for any seller to sell their car in a single visit to the branch. The seller could even find out the rough valuation of the car by feeding the required details on the portal and receiving instant payment for the same. And not only this, but CARS24 also deals with the handover of legal documentation relating to vehicle registration, if required at no additional cost to the concerned seller.
7. CARS24-Marketing Strategies
CARS24 Duniya Boli Lagayegi Campaign
CARS24 launched its Duniya Boli Lagayegi Campaign in the year 2020 which ran from October 2020 to December 2020. The campaign focused on three key features of the CARS24 platform-availability of a Unique Bidding System, a strong network of buyers from all over the country, and helping the seller to get the best deal. Initially, it was launched on television with a TVC and later on all major social media platforms like Facebook, Twitter, Instagram, and LinkedIn with the help of digital marketing & content marketing tactics.
8. CARS24-Growth and Revenue
Since its inception in the year2019, CARS24 has grown immensely and primarily operates in areas like automotive, e-commerce, retail, and used car trade. It is also hailed as one of the leading used car marketplaces across the country due to its stellar business model. In the initial years, CARS24 used to purchase cars on behalf of the dealers, which continued till 2019, however now it mostly makes purchases from customers.
Further, the automobile industry unicorn also claims to be the undisputed leader in the used cars industry in India holding over 90% of the market share. Vikram Chopra, Founder & CEO explained in an interview “CARS24 sells at least 20,000 cars each month and around 2, 50,000 in a year. It is just shy of a billion dollars worth of cars now. The business has already expanded its presence to over 200 cities with a strong workforce of 7000 members.
After making its mark in the domestic used cars industry, the start-up is also expanding its operations internationally starting with Australia, the UK, and the Middle East Countries. According to reports, CARS24 has already resumed its business operations in Sharjah, Dubai, Abu Dhabi, and Brisbane in Australia, and soon it will be resuming its business functions in Sydney and Melbourne. For which a total budget of around $100 million has been announced.
Further, on October 20, 2021, CARS24 launched seven refurbishment facilities for used vehicles called ‘Mega Refurbishment Labs’ (MRLs)across 35 acres of land in key metro markets of Delhi NCR, Mumbai, Bangalore, Ahmedabad, Chennai, Hyderabad, and Pune which will be refurbished around 20,000 cars every month with the help of 1500 auto experts across the country.
Similarly, CARS24 launched Bikes24 last year which is an online platform to digitize the process of selling and buying two-wheelers across major cities like Delhi-NCR, Pune, and Bengaluru. Finally, after receiving its NBFC license from RBI in November last year, it has partnered with Bajaj Finance to extend car financing for pre-owned cars to its customers.
9. CARS24 – Revenue, Expenses, and Financials
CARS24 witnessed a 12.6% decline in its operating revenue in the FY21 reaching a total of $371 million (Rs 2,717.9 crore) in FY21 as compared to $424.7 million (Rs 3108.8 crore) in FY20.Commissions from the sale of used/pre-owned cars made the largest contribution to the revenues accounting for 97% of the total operating revenues of the company. However, the annual revenue of CARS24 increased by around 65-70% with an annual run rate (ARR) of $1 billion for FY22 as of December 2021. Gajendra Jangid stated, “People who did not wish to purchase a car started to look for options owing due to safety issued during pandemic whereas others wish to switch vehicles from two-wheelers to four-wheelers”.
Vikram Chopra (CEO & Co-founder) further states the CARS24 business is slowly rising as the platform is witnessing a surge in traffic on the websiteagain with the monthly transactions surpassing pre-Covid levels.
10. CARS24 – Challenges
Nevertheless, even after such tremendous growth & rapid expansion, CARS24 is like any other business prone to certain risks and challenges to compete with existing as well as newcomers in the used cars industry. Besides, ensuring a smooth & continual supply of used cars might also arise a challenge for the business shortly.
i) CARS24 Shutdown of Supply-Focused Vertical
According to an internal note exchanged between the co-founders of the country and its employees, it was reported that CARS24 was shutting down its business primarily focused on supply across 82 cities of India as of December 10, 2021. The business was reportedly only to run its supply-side business verticals in the top 100 cities of India.
ii) ARS24Mass Layoffs
CARS24 announced layoffs of around 600 employees bidding farewell to around 6.6% of its total workforce.in May 2022 along with other start-ups like Meesho, Vedantu, and Byju’s. The primary reasons for such decisions are reportedly cost-cutting, fears of a dearth of fundraisers, and the apprehension of a market recession that is coming soon, as the start-up is planning to automatize its operations.
11. CARS24 – Competitors
CARS24 directly faces cut-throat competition in the market. It competes with companies that operate in the same segment and caters to the same target audience such as-
- Cardekho
- Droom
- Quikr Auto
- Olx
- CarTrade
- Spinny
- CredR,
- NDTV Auto
12. CARS24 – Funding and Investors
To date, CARS24 has raised a total sum of $1.3 billion over 15 rounds including five Debt Financing rounds. According to Crunchbase, the latest tranche of investment came through Debt Financing on December 20, 2021, for a sum of Rs. 7.6 billion from an unknown source. This latest funding round has ramped up the valuation to up to $3.3 billion as of December 20, 2021.Alibaba and Tencent Holdings are recent investors
Being India’s leading online transaction platform for pre-owned vehicles, CARS24 raised a sum of $200 million in Series E funding from its investor DST Global along with other existing investors namely Exor Seeds, Moore Strategic Ventures, and Unbound on Nov 24, 2021, that helped it to reach a valuation over $1 billion, making it one of the first businesses to enter the unicorn club in 2021.
CARS24 has a total of 39 investors namely Alibaba Group, Moore Strategic Ventures, SoftBank Vision Fund, DST Global, Alpha Wave Global, Commercial Bank of Dubai, and Alpha Wave Incubation, among others. In August 2021, Mahendra Singh Dhoni also invested an undisclosed sum as a part of its Series D funding round and was also signed as the brand ambassador of the CARS24 business. However, when CARS24 converted itself into a public company, a news report claimed that Mahendra Singh Dhoni partially exited the business by selling his stake.
With enough funding in its reserves, CARS24 is planning to buy ESOPs worth Rs.75 crores from its employees as part of its ESOP plan. Such buy-back has been estimated to be valued at more than half of the amount sold to it by its employee shareholders currently.
13. CARS24 –Key Partnerships
- Bajaj Finance- After receiving its NBFC License from RBI in Nov 2019, it partnered with another leading NBFC in the country to extend car financing facilities to its customers making the whole process of selling a used car simple, faster, and efficient.
- Poonawalla Fincorp- CARS24 and Poonawalla Fincorp Ltd. another NBFC based in Pune announced their strategic partnership on Nov 23, 2021, through which they could facilitate car financing better while sharing risks and rewards.
- Driva-Further, CARS24 entered a strategic partnership with Driva, an online car financing business based in Australia on September 13, 2021, with the primary intention to offer a loan matching system that will help the concerned customers to Check out with finance within minutes.
14. CARS24 – Future Plans
CARS24 has witnessed tremendous growth and popularity among the common masses for its quality, efficient and reasonable services. In the coming years, CARS24 intends to keep expanding its business and increase its client base. Vikram Mehta, Founder & CEO stated “Our motive is to expand across India and give our customers a hassle-free selling experience. Any car owner could easily sell off his car in a matter of hours by driving to the nearest CARS24 branch. And, to make it a reality we are heavily investing in technology in making our technologies more robust, convenient & friction-less”.
After witnessing a promising growth of 3000+ deals in the used bikes segment and obtaining approvals for its car financing business in Nov 2019, CARS24 is also trying to expand its business and even has established a revenue target of $2 billion by FY23. Lastly, CARS24 has also announced its upcoming plans to list itself on the Indian stock exchange by bringing an initial public issue in 18-24 months for which it has already converted itself into a public company namely Global Car Group Ltd. which was earlier known as Global Car Group Pte. Ltd. Therefore with its unique business model & robust technologies in place, the future looks promising for CARS24.
