Online Automobile Seller Cars24's Fresh Fundraising Round may Result in a $3 Billion Valuation

Cars24, an online marketplace for selling used automobiles, is in advanced talks with its existing backer Falcon Edge to close a $250-300 million fundraising round.

Cars24's valuation is expected to rise to $3-3.3 billion if the round goes through, up from $1.84 billion in September when it closed a $450 million funding round led by Soft Bank Vision Fund II, Falcon Edge, and Yuri Milner's DST Global.

According to sources, the company is considering selling secondary shares as part of the transaction, although nothing has been decided yet.

A person close to the situation said, “unlike the last round, Falcon is cutting the single largest cheque this time. Rest of the existing investors will be participating in it”. A $110 million debt component was included in the company's September investment round.

The used automobile sector is seeing accelerated expansion, due to the Covid-19 pandemic, and businesses like Spinny are raking in funds from investors like Tiger Global. Last week, Tiger Global increased its stake in Spinny by co-leading a $285 million Series-E capital round with Abu Dhabi-based ADQ, valuing the company at $1.75 billion, making it a unicorn. Cars24 competes with companies like CarTrade, Cardekho, and others in addition to Spinny.

To boost its worldwide expansion, the corporation, which has a strong market position in India, may consider purchasing smaller players in other markets.
It has also begun selling two-wheelers, which are now accessible in the Delhi NCR but are slated to be spread across India, according to sources familiar with the company's intentions.

It has a non-banking financial firm license, which allows it to offer vehicle purchase financing in addition to selling cars and motorcycles. According to sources, it is considering expanding its lending arm's distribution through NBFC investments and acquisitions
Vikram Chopra, Mehul Agrawal, Ruchit Agarwal, and Gajendra Jangid founded Cars24 in 2015, and it became a unicorn last year after a $200 million fundraising round sponsored by DST Global.

According to a survey recently released by classified firm OLX Autos and ratings and research agency CRISIL, the Indian used car market is predicted to reach over 70 lakh vehicles by 2025-26, up from 38 lakh in 2020-21, with a growth rate of 12-14 percent over the next several years.