Chennai: 2021 was a good year for used car platforms with 3 startups – Droom, CarDekho and Spinny – joining the Unicorn Club (over $ 1 billion) this year. Investors invest money due to the strong growth of the business, which ranges from 2x in 3 years to 8x in 10 years.
When Spinny raised $ 283 million earlier this month, it had more than doubled its valuation to $ 1.8 billion in just 6 months. Similarly, in December, Cars24 grew its value by 60% to $ 3.3 billion in just 3 months.
CarDekho raised $ 250 million in October, including $ 200 million in Series E equity and $ 50 million in debt in its pre-IPO round, while Droom raised the first leg of its ongoing growth financing round ahead of the IPO of to to $ 200 million.
According to a current OLX Auto-Crisil study, the country’s used car sales will almost double in 4 years from just under 4 million units in FY21 to 7 million units. According to estimates, the segment should be just under 4.4 million units by the end of FY22. “The used car market will reach 10 million vehicles with a CAGR of 14% by FY 30 – how many segments can promise such growth?” into the digitization of a larger part of the ecosystem, ”said Amit Kumar, CEO of OLX Cars.
Unicorn startups are already building workers and markets as they scale tech infrastructure. Niraj Singh, Founder and CEO of Spinny, said, “We are present in 13 cities and will expand to 25 cities in two quarters.”
“We are expanding our presence in Australia, Thailand and the Middle East and will use these funds for further international expansion,” said Cars24 founder and CEO Vikram Chopra.
The financial locks and the aggression of the unicorns also let the market leaders step on the gas. Mahindra First Choice Wheels, which has a 50% share of the organized used car market. CEO Ashutosh Pandey said, “We are planning a fundraiser to build our lead in retail.”
Auto experts say that investing optimism in used cars is more likely to be directed towards the future. “Investing in used cars is like FOMO – people feel like they are being left out at the next bull run,” said Pandey. “What has happened to cell phones in the last 10 years will also happen to used cars. The pandemic and chip shortage are tailwinds for new cars, but the long waiting list has led consumers to turn to used cars. This is a globally growing category where the ratio of used to new is 3: 1, while in India it is 1.5: 1 and growing rapidly, ”added Vikram Chopra of Cars24. For investors, this means that used cars have the potential to be the “next Zomato”. “Even at these numbers, unicorn auto tech ratings will hit $ 7-8 billion. It’s too big to let go, ”added an angel investor.
Used car Cos in top equipment, 3 unicorns in 2021 | Chennai News
