NEW DELHI: A major beneficiary was Cars24 Services Pvt., an online marketplace for used cars based in Gurgaon, India. The company’s valuation jumped to more than $1 billion after a new round of funding, Cars24 plans to announce Tuesday. DST Global, the investment firm led by Russia-born billionaire Yuri Milner, invested $200 million in the deal.
India’s mass transit systems, unreliable even before the coronavirus pandemic, were shut off completely when the country locked down. As a result, Indians rushed to find alternative transportation, and that often meant used cars.
The investment doubles the total funds raised by Cars24 since the business was established five years ago. The chief executive officer and co-founder, Vikram Chopra, was an investment analyst early in his career at Sequoia Capital, one of the world’s most prominent venture capital firms and now a Cars24 investor.
Vikram Chopra started Cars24 after having a hard time selling his car before a temporary move to the U.S., he said. Daunted by the situation, he ended up giving his car to a friend instead, he said.
By the middle of this year, Cars24 saw sales rise 20% from pre-lockdown levels. That followed some weeks in the spring when the site generated no revenue whatsoever. At first, Chopra thought the numbers reflected pent-up demand that would be short-lived but said sustained high levels of traffic to the site suggest otherwise.
Cars24, which takes a cut of each transaction, is on track to generate estimated gross annual revenue of $600 million, Chopra said. “Our awareness among consumers has shot up dramatically,” he said.