The pandemic has pushed an online used car seller into India’s unicorn club
Indians’ fear of contracting coronavirus has given birth to the country’s latest unicorn.
On Nov. 24, Cars24 India, an online marketplace for second-hand cars, said it had raised $200 million (Rs1,330 crore) on a valuation of over $1 billion. The Gurugram-based company raised the money from DST Global, the investment firm led by Russia’s most influential tech investor Yuri Milner.
Cars24 joins a host of Indian startups that crossed $1-billion in valuation during the pandemic. Most of these ventures got a push as Indians opted to stay indoors and transact online to avoid contracting the virus.
The pandemic has also given a boost to the used cars industry in India as people try to avoid public transport.
In the financial year ending March 2019, Cars24 reported revenue of $240 million. Now, it is aiming to generate annual gross revenue of $600 million, as per the company’s CEO Vikram Chopra. Given the recent trends, that might not be hard to achieve.
Boom for the pre-owned car market
Since June, when the lockdowns in India lifted, Cars24 has seen a 20% rise in sales. “Our awareness among consumers has shot up dramatically,” Chopra, who initially thought the increase in sales would be short-lived, told Bloomberg.
Cars24 is not alone in witnessing this trend. OLX, an online marketplace for all kinds of used goods, has also registered a spike in sales of pre-owned vehicles. “As India started unlocking, consumers realised that they need to own a personal car to meet their day to day transportation needs… Pre-owned cars offer the best value realisation to these consumers at a time when their incomes have been impacted,” said Amit Kumar, head of OLX Autos India.
At OLX’s trading platform for pre-owned cars, the company witnessed the demand going up by 133% after the lockdown while supply is up by 112%.
In October, OLX also conducted a survey among 5,800 people to determine the sentiment of automobile buyers and sellers across India for pre-owned cars. As per the findings of the survey, car buyers were shunning shared modes of transportation and opting for personal cars. Over 20% of respondents said they would prefer to buy a pre-owned car for their daily office commute while 67% of the respondents said that they would buy a used car to travel with their families.