When it comes to Indian MNCs associated with the buying and selling of used cars, the company Cars24 tops the list. Founded in 2015, it became one of the major organized players operating in the used car segment in India. Within 8 years of its establishment, it expanded its presence to Thailand, Australia, and UAE. Not just that but Cars24 valuation also soared at $3.21 billion (Rs.26,322 crore).
How did it achieve a sky-high valuation? You may wonder. All thanks to its shareholders and 16 funding rounds. In this article, we will shed light upon its shareholding pattern and funding rounds. Also, we will explain the financials of the company.
Shareholding Pattern of Cars24
The company’s largest shareholder is DST Asia owning a 22.80% stake in the company. It is followed by KCK Limited and Kingsway Frontier Consumer Internet Fund. The new investors namely Alpha Wave and Tencent have acquired a 4.5% stake individually.
Let’s look at the shareholding pattern of Cars24-
|Shareholders of Cars24||Percentage of Stake Owned|
|Kingsway Frontier Consumer Internet Fund||12.53%|
|Vikram Chopra (Co-founder)||7.01%|
|Mehul Aggarwal (Co-founder)||6.25%|
|Alpha Wave Incubation||4.50%|
|Indian Continent Investment||4.10%|
|Moore Strategic Partners||3.50%|
|Ruchit Aggarwal (Co-founder)||0.47%|
|Gajendra Kumar Jangid||0.20%|
The collective stake-holding percentage of the founders is 13.93%.
Cars24 Valuation and Funding Rounds
As you have read above, Cars24 valuation is $3.1 billion (Rs.26,322 crore). And all of it is due to the multiple funding rounds of the firm.
|Venture Capitalists(Lead Investors)||Funding Amount||Date|
|(Undisclosed)||$7.6 billion (Rs.62,320 crore)||December 20, 2021 (Debt Financing Round)|
|Alpha Wave Global||$278 million (Rs.2,280 crore)||December 20, 2021 (Series G)|
|Commercial Bank of Dubai||$20 million (Rs.164 crore)||November 30, 2021 (Debt Financing)|
|(Undisclosed)||$110 million (Rs.902 crore)||September 20, 2021 (Debt Financing)|
|Alpha Wave Global, SoftBank Vision fund||$340 million (Rs.2,788 crore)||September 20, 2021 (Series F)|
|Trifecta Capital Advisors||$1.2 million (Rs.10 crore)||June 30, 2021 (Debt Financing)|
|DST Global||$200 million (Rs.1,640 crore)||November 24, 2020 (Series E)|
|Vivriti Capital||$1.2 million (Rs.10 crore)||July 9, 2020 (Debt Financing)|
|Global Car Group||Rs.3.1 billion (Rs.25,420 crore)||November 6, 2019 (Private Equity Round)|
|Unbound||(Undisclosed)||October 30, 2019 (Series C)|
Cars24 raised capital worth $1.3 billion (Rs.10,660 crore) in funding over 16 rounds. Its latest funding round occurred on December 20, 2021. Out of 37 investors, 14 are the lead investors.
How does Cars24 work?
Cars24 typically works in the following ways-
Step1: Car Inspection
First of all, you need to schedule an appointment with Cars24 at one of their branches. You can also use their doorstep inspection service. A trained professional inspects your car’s condition, documents its details, and performs a thorough evaluation.
Step 2: Valuation of your Car
Based on the inspection, Cars24 uses its proprietary algorithm and market data to determine the fair market value of your car.
Step 3: Offer
After the valuation process, Cars24 makes an offer to buy your car. You can accept or negotiate the price if you feel it’s necessary.
Step 4: Documentation
If you accept the offer, you need to provide the necessary documents. Such as vehicle registration, insurance papers, and ID proof to complete the sale process.
Step 5: Ownership Transfer
Cars24 handles the paperwork and ownership transfer process, ensuring a smooth and hassle-free experience for you.
Step 6: Payment
Once the documentation is complete, Cars24 pays you the agreed-upon amount through a secure payment method. It is often done instantly or within a short period.
A similar process takes place when you buy a second-hand car from the Cars24 platform.
Cars 24 Financials
Now with a whopping Cars24 valuation worth $3.1 billion (Rs.26,322 crore), the next question that arises is its profitability. Is Cars24 profitable?
To get the answer to that, you need to consider its revenue and expenses breakdown.
Cars24’s main sources of revenue and money earned are given in the table below-
|Revenue Sources||Money Earned in FY22|
|Sale of Goods||Rs.5,868 crore|
|Sale of Services||Rs.39 crore|
|Other Operating Revenue||Rs.165 crore|
|Total Revenue||Rs.6,072 crore|
Now, let’s look at the expenditures of the company-
|Expenses||Money Spent in FY22|
|Cost of material consumed||Rs.6,059 crore|
|Employee benefit expenses||Rs.700 crore|
|Advertising and promotional expenses||Rs.413 crore|
|Contractual manpower expenses||Rs.114 crore|
|Car handling charges||Rs.69 crore|
|IT cost||Rs.48 crore|
|Total Expenses||Rs.7,942 crore|
From the above two tables, we can see that the value of expenses exceeded the amount of revenue earned.
Overall Financials of Cars24
Now it is time to look at the overall financials of the company-
|Market Valuation||$3.1 billion (Rs.26,322 crore)|
|Revenue Earned||Rs.6,072.4 crore|
|Profit/Loss||Loss of Rs.1,834 crore|
Well, it is obvious that a company dips into losses when its expenditure exceeds the amount of revenue earned. This is the case with Cars24 too!
Future Plans of Cars24
The second-hand car-selling firm is looking for sustainable growth in the future by reducing the rate of its cash burn. Its financial condition is similar to Spinny. In the last two fiscal years, it witnessed a massive jump in its revenue i.e. from Rs.2,796 (FY21) to Rs.6,072 (FY22). Unfortunately, its total expenses and losses increased too.
But it sees those expenses as potential investments that will provide substantial ROI in the future. It is planning to expand in the Middle East and Southeast Asia while grabbing a strong foothold in the Indian market. Also, it is expecting $2 billion in revenue in FY23.
Let’s see what happens next!